Services received from foreign shipping line

[Kaustubh Karandikar]

XYZ(India) is a freight forwarder and receiving services of a foreign shipping line towards transportation of goods by Sea in relation to importing of goods of his client in India. ACE paying to the foreign shipping line in foreign currency. Subsequently, XYZ is recovering these charges from his client in India. Is XYZ required to pay GST under reverse charge on the amount paid in foreign currency to the foreign shipping line?

AI Summary

GST Reverse Charge Debate: Freight Forwarder XYZ Faces Confusion Over Ocean Freight Liability Under IGST Notification A freight forwarder, XYZ, in India receives services from a foreign shipping line for transporting goods by sea for a client in India. XYZ pays the foreign shipping line in foreign currency and recovers these charges from the client. The query is whether XYZ must pay Goods and Services Tax (GST) under reverse charge on the amount paid. Responses indicate that XYZ, not being the importer, might not be liable under reverse charge mechanism (RCM) for ocean freight. However, others argue that since it involves an import of service, RCM is applicable under the Integrated Goods and Services Tax (IGST) notification.