reverse charge on ocean freight

[Kaustubh Karandikar]

XYZ (India) paid an amount to a PQR Logistics(India) towards freight charges for transporting the goods from U.K. to Bangladesh by Ship. Is XYZ required to pay GST on it under reverse charge being paid towards ocean freight? In my view, no RCM since the Services are not supplied by a person located in non- taxable territory. Views of the experts please.

[Shilpi Jain]

The RCM will be applicable only if the supplier of service is in non-taxable territory. In this case since both are in India, it will not be liable under RCM.

Also there seems to be no exemption applicable.

[KASTURI SETHI]

Madam Shilpi Jain ,

Just for my knowledge sake please.

You have used the word.'seems'. Is there any remote possibility of uncertainty regarding exemption ?

[Shilpi Jain]

I was only hoping an exemption to be there since the transportation from place outside India to a customs station in India is exempt.

Though noted that there is no such exemption in case where the goods were going from place outside India to another place outside India. That is why used 'seems'

[KASTURI SETHI]

Humble suggestion for all

The words,'seems' 'appears' should not find place in our drafting. These words indicate the element of uncertainty.

[Ganeshan Kalyani]

In my view, RCM is not applicable.

[Raghunandhaanan rvi]

Sir,

Since service is to be rendered outside India. In my view No GST

[Harshit Sanghvi]

RCM is not applicable as it service provider is in India. Ocean freight on export has been in exemption with sunset clause which now extended till Sep 2021. Pls refer to

https://www.cbic.gov.in/resources//htdocs-cbec/gst/notfctn-07-2021-2020-cgst-rate.pdf

Point V Entry No 19A and 19B

AI Summary

Reverse charge on ocean freight: not applicable where supplier is located in India; supplier location determines RCM liability.
Reverse charge under GST for ocean freight applies only where the supplier is located in a non taxable territory; if the supplier is an Indian entity, RCM does not apply. Exemptions for carriage to a customs station in India do not cover carriage from outside India to another foreign destination; a temporary exemption for export freight has been extended separately.