GST on Ocean Freight

[Kaustubh Karandikar]

XYZ imported goods by sea from Brazil. The invoice of Brazilian freight forwarder was in the name of Indian CHA and paid also by him. Subsequently, the Indian CHA issued a debit note on XYZ for recovery of these freight charges. The GST under reverse charge to be paid on the ocean freight paid to Brazilian freight forwarder is to be paid by XYZ or the Indian CHA?

AI Summary

GST on Ocean Freight: XYZ Liable Under Reverse Charge; CHA Acts as Facilitator per RCM Notification XYZ imported goods from Brazil, with the freight invoice issued to and paid by an Indian Customs House Agent (CHA). The CHA then issued a debit note to XYZ for freight recovery. The question was whether XYZ or the CHA should pay GST under reverse charge on ocean freight. Responses clarified that, according to the reverse charge mechanism (RCM) notification, the liability to pay GST falls on the importer, XYZ, as the CHA acts merely as a facilitator. XYZ must pay GST on ocean freight and may be eligible for input tax credit if their outward supply is taxable.