Import shipment by sea

[Gagan Chawla]

Dear Sir,

We are a shipping company based and registered in India.

We understand that Service tax has been levied @ 4.5 % on Import Freight.

My querry is , if the Invoice is raised on an Overseas party for Import freight coming into India, is Service tax levied.

The Invoice is raise don overseas party and payment is also received from overseas, please advise.

As the Company is not based in India so why should they fall into the net of Service tax of India.

AI Summary

Place of provision for goods transport makes import freight taxable in India, with tax payable under reverse charge where applicable.
Under the specific rule for goods transportation the place of provision is the place of destination; where the destination is India the service is treated as provided in India and is not an export of service. Inward transportation by vessel, having had its Negative List exclusion removed, is therefore taxable in India and tax may be payable by the Indian recipient under the reverse charge mechanism.