Reverse charge IGST on ocean freight in CIF imports applies where foreign vessel transport is covered by the GST notification.

Reverse charge IGST applies to ocean freight in CIF imports because transportation of goods by a foreign vessel to an Indian port is treated as an inter-State supply covered by the GST reverse charge notification, making the importer liable as recipient. On FOB imports, the authority declined to rule on exclusion of ocean freight from the assessable value for IGST on imports, holding that import valuation is governed by customs law and falls outside advance ruling jurisdiction under the GST framework.

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Issues: (i) Whether, in the case of import of goods on CIF basis, the importer is liable to pay GST on the ocean freight component paid by the foreign supplier to the shipping company; (ii) Whether, in the case of import of goods on FOB basis, the value of ocean freight is to be excluded while determining the value of imported goods for IGST on import, to avoid double taxation.

Issue (i): Whether, in the case of import of goods on CIF basis, the importer is liable to pay GST on the ocean freight component paid by the foreign supplier to the shipping company.

Analysis: Transportation of goods by a foreign shipping entity to a port in India is an inter-State supply under the Integrated Goods and Services Tax Act, 2017. The charging provision permits tax on such supply, and the reverse charge notification specifically covers services supplied from outside the taxable territory by way of transportation of goods by vessel up to the customs station of clearance in India, identifying the importer as the recipient liable to pay tax.

Conclusion: The importer is liable to pay IGST on ocean freight under reverse charge mechanism.

Issue (ii): Whether, in the case of import of goods on FOB basis, the value of ocean freight is to be excluded while determining the value of imported goods for IGST on import, to avoid double taxation.

Analysis: The levy and collection of IGST on imported goods is governed by the Customs Tariff Act, 1975 and valuation rules under the Customs Act, 1962. The authority held that determination of the value of imported goods falls within the domain of the customs valuation framework and not within the scope of the ruling provisions under the CGST/RGST Act, 2017.

Conclusion: No ruling was given on exclusion of ocean freight from the assessable value for import.

Final Conclusion: The ruling fastens reverse charge IGST liability on CIF ocean freight, while declining to pronounce on valuation exclusion of ocean freight for FOB imports as beyond jurisdiction.

Ratio Decidendi: Where a statutory reverse charge notification expressly covers the foreign vessel transportation service, the importer is liable to pay IGST on that service; questions of import valuation governed by customs law lie outside the advance ruling authority's jurisdiction under the GST framework.

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