GST on export ocean freight - freight forwarder

[Sunish Ahuja]

Afternoon Sir/Mam,

Under GST regime, ocean freight on export is exempted. Shipping line (based outside India) doesn't charge GST on ocean freight.

Now, the point I need to understand - A (Freight forwarder) buys a freight of $1000 from a shipping line and sells $1500 to an actual exporter. Since, ocean freight is exempted from GST. Shipping company doesn't charge GST on $1000 nor did the freight forwarder charged his customer GST on ocean freight of $1500.

Is GST payable on the profit/margin earned of $500 on the name of ocean freight?

Your any help in aforesaid issue would be much appreciated!

Regards

Sunish

AI Summary

GST Implications on Ocean Freight: Are Freight Forwarders' Profit Margins Exempt? Complexities and Audit Concerns Explored A discussion on the Goods and Services Tax (GST) implications on ocean freight for freight forwarders highlights several perspectives. A freight forwarder buys freight from a shipping line and sells it to an exporter, with the shipping line not charging GST on ocean freight. The question is whether GST is payable on the $500 profit margin. Responses suggest that if the original supply is exempt, the profit margin should also be exempt. However, complexities arise if the freight forwarder provides additional services, potentially classifying the supply differently. Some contributors mention audits imposing GST on total freight billing, arguing that freight forwarders cannot bill ocean freight under the current GST regime.