Service Tax and GST onOcean Freight

[Prashant Gupta]

Sir

Recently in my final audit of Excise and Service Tax for pre GST era, I was taxed for Ocean Freight for the period 23rd April 2017 to 30th Juna 2017.

I was aware of notification of 1/2017 & 2/2017 of Service Tax Act but was not aware of notification no 16/2017 which transfers the liability on the Importer.

Not GST is also payable on it on RCM.

I just want to ask that don't you think that this is double taxation.

When we have pade custom duty and Excise/GST on CIF value of our goods imported than why shall we pay again Service Tax/ GST on F part of this CIF value.

Can you please explain the matter.

AI Summary

Composite supply principle prevents separate GST on ocean freight, taxing freight with imported goods under customs valuation.
Imported goods and their ancillary services, including ocean freight, are treated as a composite supply with goods as the principal supply; accordingly, GST on imports is levied on the aggregated transaction value (which includes freight) and collected at customs, and freight should not be separately taxed again where it has been included in the composite import valuation.