GST on ocean freight

[Kaustubh Karandikar]

XYZ (India) (Freight Forwarder) had paid the amount to a foreign shipping line towards ocean freight in foreign currency. This amount along with mark up was recovered from the importer in India i.e., the client of XYZ who had entrusted the work to XYZ towards transportation of goods by Sea against imports. XYZ charged the importer GST @ 5% under the head ‘Transport of goods in a vessel’(SAC Code 9965). Is it correct?

AI Summary

Foreign Shipping Charges: XYZ Rightly Applies 5% GST for Sea Transport Services Under SAC Code 9965 XYZ, a freight forwarder in India, paid a foreign shipping line for ocean freight in foreign currency. XYZ then charged an importer, their client, a 5% GST under the category 'Transport of goods in a vessel' (SAC Code 9965) for transporting goods by sea. A respondent clarified that this tax rate is applicable based on the service provided, not the service provider, meaning XYZ's application of the 5% GST rate is appropriate since the service involves the transportation of goods in a vessel.