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?

AI Summary

Discussion on GST Reverse Charge for Ocean Freight in FOB & CIF Contracts, Citing Notification No. 8/2017. A forum discussion addresses the Goods and Services Tax (GST) on ocean freight, specifically under reverse charge for Free on Board (FOB) and Cost, Insurance, and Freight (CIF) contracts. An individual queries whether importers must pay Integrated GST (IGST) at 5% on freight charges for FOB contracts and on 10% of the CIF value for CIF contracts, referencing Notification No. 8/2017. Respondents confirm the understanding and provide additional advice on claiming input credit and the implications of not paying reverse charge mechanism (RCM) for previous financial years. Amendments and exemptions related to ocean freight are also discussed.