GST on service of transportation of goods by air freight.

[Manoj Mahimkar]

Import Ocean Freight:

The logistic company hires services of Shipping Company for the transportation of goods on principle to principle basis. The Shipping Companies pay GST under RCM and charges the same to Logistic Company. The logistic Company further charges The same while raising the invoice upon its client. The said transaction is taxable sales with full entitlement of common ITC incurred

In the cases where the foreign shipping has raised the invoices upon the logistic Company, it does not charges GST as it does not have place of business in India. Hence the Logistic Company pays GST under RCM and levies the same in the Sales invoice. The said transaction is taxable sales with full entitlement of common ITC incurred

The Logistic Company is engaged in the transportation of goods by air within India. The said transaction is liable to tax under GST with a full entitlement of common ITC incurred

Export air freight/ocean freight:

The logistic company is engaged in the transportation of goods by air/ocean from the customs station for clearance in India to place outside India. Said transaction is exempt sales with a full entitlement of common ITC incurred

Import Air Freight:

The logistic company is engaged in the transportation of goods by air/ocean from place outside India to custom station for clearance in India. Said transaction is exempt sales and being so such sales would be considered as Exempt Sales for the purpose of reversal of common ITC

I want to confirm whether the observation highlighted in a bold letter are as per the provision of GST law?

AI Summary

Logistics Firm's GST Practices Validated: Reverse Charge on Import Ocean Freight, Full ITC on Domestic Air, Exempt Export Freight A discussion on the Goods and Services Tax (GST) implications for a logistics company handling transportation of goods by air and ocean freight. The logistics company charges GST under the Reverse Charge Mechanism (RCM) for import ocean freight when foreign shipping companies do not have a business presence in India. Transactions involving domestic air transportation are taxable with full input tax credit (ITC) entitlement. Export freight services are exempt from GST but still allow for full ITC. The forum confirms that these practices align with GST provisions, despite a request for clarification on highlighted observations.