Service tax on ocean freight-on import export transportation of goods by Sea

[Narendra Soni]

Dear Experts,

Service tax has been introduced on inward & outward transportation of goods by Sea. Kindly confirm Is service tax now payable on Ocean freight paid to shipping and air lines ??

AI Summary

Service Tax on Ocean Freight: Clarification on Applicability and Reverse Charge from June 1, 2016, After Budget Changes. A discussion on a forum centers around the applicability of service tax on ocean freight for import and export transportation of goods by sea, following changes in the Union Budget 2016-17. Participants seek clarification on whether service tax is payable on ocean freight paid to shipping lines and freight forwarders. It is clarified that service tax applies to ocean freight for transportation of goods by vessels from outside India to India and vice versa, effective from June 1, 2016. The tax is imposed under reverse charge for foreign shipping lines, and credit may be available for Indian businesses. There are concerns about potential double taxation and the scope of the tax on different shipping terms.