TaxTMI 
TaxTMI 
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.
GST on air freight recovered
01 Dec 2021 
6 Replies 
3220 Views Asked by
GST on freight recovery: export exemption limited; domestic currency reimbursement likely attracts GST unless contract and payment satisfy export conditions.
GST on recovered airfreight depends on transaction character, payment currency, and contract terms: export freight is exempt only if export of service conditions (including payment in foreign currency) are met; re import freight is not automatically exempt. Recoveries may be reimbursements (not supplies) if contractually borne by the exporter, but pure agent tests often fail. Where tax is charged, importer may claim input tax credit and may need to reverse proportionate ITC or pass tax cost to the exporter. (AI Summary)
GST on recovered airfreight depends on transaction character, payment currency, and contract terms: export freight is exempt only if export of service conditions (including payment in foreign currency) are met; re import freight is not automatically exempt. Recoveries may be reimbursements (not supplies) if contractually borne by the exporter, but pure agent tests often fail. Where tax is charged, importer may claim input tax credit and may need to reverse proportionate ITC or pass tax cost to the exporter. (AI Summary)