TaxTMI 
TaxTMI 
XYZ is in the business of ‘Logistic Support’ for Export and Import consignments. For this purpose, they hire the services of clearing and forwarding agents and agents who are supplying shipping line services. For export consignments, the amount charged by the clearing and forwarding agent towards clearing the goods are in turn recovered by XYZ from his clients with mark up and paying GST on it. However, in case of Ocean freight paid to agent who is arranging the shipping line, XYZ though recovering the ocean freight from the client with mark up, but not charging GST on it being exempted. Is XYZ right in not charging GST?
GST on export ocean freight
10 Aug 2022 
6 Replies 
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Export ocean freight exemption may apply but tax depends on whether services are treated as separate or principal supply.
Export ocean freight may be nil-rated under the exemption for transportation of goods by vessel to a place outside India (SAC 9965); whether GST must be charged turns on contractual characterisation. If ocean freight is a separate, independent supply the exemption applies to that element. If the contract creates a composite supply, the tax status depends on the principal supply as determined by contract terms and trade practice. (AI Summary)
Export ocean freight may be nil-rated under the exemption for transportation of goods by vessel to a place outside India (SAC 9965); whether GST must be charged turns on contractual characterisation. If ocean freight is a separate, independent supply the exemption applies to that element. If the contract creates a composite supply, the tax status depends on the principal supply as determined by contract terms and trade practice. (AI Summary)