service tax on cif value on imports

[Ramakrishnan Seshadri]

Dear Sir,

We are the manufacturer of automobile parts suppliying to OEM. We are having regular imports of CKD parts and machineries. Now we heard from other companies that the Excise department during audit asking the assessees to pay service tax of 1.5%(including cess) on the CIF value of imports from April 23rd to June 2017.and also this applicable under gst regime also.

They are giving the details as File no.354/42/2016 TRU dt.13.04.2017 and the notification no.14/2017/ 15/2017/ 16/2017 dt.13.04.2017.

Kindly request the experts to guide us the same on this issue.

Thanks & REgards

S.Ramakrishnan

AI Summary

Service tax on CIF value: importer liable under reverse charge for sea freight services, raising double taxation and credit issues.
Insertion of Rule 6(7CA) made the importer liable to pay service tax on the CIF value where supplier and vessel transporter are located outside India, effective from 22 January 2017, producing audit demands for that period; concerns of double taxation arise because freight is included in customs assessable value. Under GST, the same activity is made taxable to IGST with reverse charge on the importer when the supplier is abroad and input tax credit is restricted by statutory exclusions, while recovery provisions treat pre-GST liabilities as arrears not admissible as input tax credit.