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?

[Himansu Sekhar]

No bold lettered word is found. Will you please make a precise question?

[KASTURI SETHI]

Import Ocean Freight: Yes. Agreed.

Export air freight/ocean freight: Yes Agreed

Import Air Freight: Yes. Agreed

AI Summary

GST treatment of freight services: reverse charge for certain imports, domestic freight taxable, exports exempt with ITC consequences. Import ocean freight where the supplier lacks a place of business in India falls under the reverse charge mechanism, with the logistic company paying GST and treating its onward invoice as a taxable supply with full common input tax credit entitlement. Domestic air carriage is taxable with full ITC. Export air/ocean freight is exempt yet allows full ITC. Import air freight is exempt and treated as exempt sales for reversal of common ITC.