GST on Ocean Freight

[Kaustubh Karandikar]

In case of GST under reverse charge on ocean freight, for FOB contracts, importer to pay IGST @ 5% as per Sr. No.9(ii) of Notification. No. 8/2017-Integrated Tax (Rate) on freight charges paid to the foreign shipping line. In case of CIF Contracts, importer to pay IGST @ 5% as per Sr. No.9(ii) of Notification. No. 8/2017-Integrated Tax (Rate) on 10% of the CIF value as per Bill of Entry (Without considering the Gujarat High Court decision). Is my understanding correct?

[Rajagopalan Ranganathan]

Sir,

Your understanding is correct.

[Ganeshan Kalyani]

Sir, it is advisable to pay IGST and claim credit, subject to condition.

[ARVIND JAIN]

1) If RCM on ocean freight is not paid for FY 18-19 and 19-20, than for 18-19 the date of claiming input credit is gone (20.9.2019) and for 19-20 it can be shown in current 3b of September 2020 and it can be claimed in 20-21 (Or 19-20 ??? I doubt) as paid before 20.10.2020.

( 2) And any RCM paid via DRC 03 on this matter will not be eligible for Input.

Is my understanding correct and is there any other way or just rely on Gujrat high court judgement and not paying RCM at all.

[Amresh kumar]

Dear sir,

Refer Notfn 02/2018 central tax vide which is amendment of Notfn 2/2017 dated 28.06.2017. After sr no 19 19A and 19 B is inserted. My view is this is reg ocean & Air freight which is exempted till September 2018.last notfn is 4/2020 dtd 30/09/2020 vide which exemption is valid till October 2021.

Correct me it these are related with ocean freight or not.

AI Summary

Reverse charge on ocean freight: importer liable to pay IGST and may claim input credit subject to conditions.
Reverse charge on ocean freight makes the importer liable to pay IGST on freight charged by foreign shipping lines: under FOB the IGST is on the freight invoice to the carrier, while under CIF the IGST is levied on a stated portion of the CIF value in the bill of entry. Importers commonly pay IGST and later claim input credit, but statutory time limits and the mechanism of payment affect eligibility to claim that credit; notification-based exemptions for international freight can suspend the reverse charge for specified periods.