ocean freight paid rcm applicability

[satbir singhwahi]

EXPORTING GARMENTS FIRM , PAYING OCEAN FREIGHT ON IMPORTS AND EXPORTS. PLS GUIDE THE APPLICABILITY OF RCM FOR JULY 2017 TO TILL DATE.

[DR.MARIAPPAN GOVINDARAJAN]

Your query requires some more details.

[satbir singhwahi]

SIR

GARMENTS EXPORTING FIRM :

1. PAYING OCEAN FREIGHT ON IMPORT OF CLOTH. WHETHER RCM IS APPLICABLE ON SUCH PAYMENT OF OCEAN FREIGHT.

2. EXPORTING GARMENTS ON CIF PRICE. THUS PAYING OCEAN FREIGHT.WHETHER RCM IS APPLICABLE ON SUCH PAYMENT OF OCEAN FREIGHT.

[KASTURI SETHI]

In my view, it is covered under Section 13(9) of IGST Act, 2017. Also see serial no.10 of Notification No.10/2017-IT(Rate) dated 28.6.17 and Serial No.9(ii) of Notification No.8/17-Integrated Tax (Rate) dated 28.6.17. RCM is applicable.

[DR.MARIAPPAN GOVINDARAJAN]

RCM is applicable.

AI Summary

Reverse charge mechanism applies to ocean freight on imports and CIF exports, making the recipient liable for tax. Advisory: the reverse charge mechanism applies to ocean freight paid by the exporter both for ocean freight on imported cloth and for ocean freight on CIF priced exports, relying on the statutory reverse charge provision and the notified entries treating such sea transportation services as subject to reverse charge; the forum conclusion affirms RCM applicability.