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

Intermediary margin on ocean freight may follow the exempt underlying service; role and contract determine GST exposure.
Whether a freight forwarder's markup on export ocean freight is taxable depends on whether the forwarder acts as an intermediary/agent arranging an exempt ocean transport service or functions as principal; the agreement, factual allocation of liability, composite supply characterisation, and Service Accounting Code classification determine whether the markup is part of the exempt supply or a taxable service, with audit exposure where invoices are recharacterised.