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

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.