GST on air freight recovered

[Kaustubh Karandikar]

XYZ(India) imported goods from PQR, Singapore. These goods were found defective and therefore the same were re – exported under LUT. After repairs, it was again re – imported. The airfreight and other and customs related charges for export and re - import charged by the CHA was recovered from PQR, Haryana at actuals. Is XYZ required to pay GST on the amount recovered. Sir, in my view since Air Freight on export is exempted, no GST is payable however proportionate ITC to be reversed. Views of the experts please.

AI Summary

GST Implications on Airfreight and Customs Charges Recovery for Re-Imported Goods under Section 13 XYZ (India) imported goods from PQR, Singapore, which were found defective and re-exported for repairs under a Letter of Undertaking (LUT). Upon re-import, airfreight and customs charges were recovered from PQR, Haryana. The discussion revolves around whether XYZ must pay GST on these recovered amounts. It is suggested that while airfreight for export is exempt, re-import freight may not be. If the contract specifies repairs by the exporter, reimbursement should not be considered a supply of service. However, since the recovery is in INR, it does not qualify as an export of service, thus GST may be applicable.