IGST on ocean freight in CIF imports was held ultra vires after tax on the full CIF value was already paid.

In CIF imports, a further levy of IGST on ocean freight under Notification No. 8/2017-Integrated tax (rate) and Entry 10 of Notification No. 10/2017-Integrated tax (rate) was found impermissible because IGST had already been paid on the full CIF value; the levy was therefore treated as lacking legislative competence and ultra vires. Relying on the Supreme Court's ruling in Mohit Minerals, the challenge to the notifications succeeded, and consequential refund relief was accepted for processing in accordance with law within the stipulated time.

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Issues: Whether, in case of CIF contracts, the levy of IGST on ocean freight under Notification No. 8/2017-Integrated tax (rate) dated 28.06.2017 and Entry 10 of Notification No. 10/2017-Integrated tax (rate) dated 28.06.2017 was without legislative competence and liable to be declared ultra vires and unconstitutional.

Analysis: The relief claimed was considered in the light of the decision of the Supreme Court upholding the Gujarat High Court in M/s. Mohit Minerals Pvt. Ltd. The parties accepted that, in view of that ruling, the challenge to the levy on ocean freight in CIF imports deserved to succeed. The petitioners' request for consequential refund relief was also accepted, with the application to be processed in accordance with law within the stipulated time.

Conclusion: The impugned levy on ocean freight in CIF contracts was held to be impermissible, and the challenge to the notifications succeeded.

Ratio Decidendi: Where IGST has already been paid on the full CIF value of imports, a further levy of IGST on ocean freight under the impugned notifications lacks legislative competence and is ultra vires.

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