GST on ocean freight for import purchase under RCM

[Pradeep Sarangi]

Dear Expert,

is gst applicable on ocean freight for import purchase under RCM ? What is the tax rate & how to calculate the same ?

Regards

Pradeep

[Alkesh Jani]

Shri

Please elaborate the query, do you mean GST applicable on ocean freight for import of Goods specified under RCM?

Thanks

[Pradeep Sarangi]

Yes Sir,

Applicablity of GST on ocean freight for import of goods. As per hon'ble judgement of SC, regarding the case of state of Union vs Mohit Minerals - 2022 (5) TMI 968 - SUPREME COURT. is it applicable for importer under RCM now ?

Regards

Pradeep

[Kiran Tahelani]

If goods are imported under CIF basis- No Rcm- Mohit Mineral case

if goods are importered under FOB basis:

---if shipper is located in india- he will charge gst under forward charge- you dont have to pay under rcm

---if shipper is foreign entity not registered in india- you need discharge gst under RCM-since mohit mineral covers only cif contract.

Rate is 5% on actual frieght amount.

Note: other experts please correct me if i am wrong.

[Alkesh Jani]

Shri

I agree with the views expressed by the expert above.

Thanks

[Shilpi Jain]

Liability under RCM exists if you engage the foreign shipper.

No liability under RCM in your hands if the foreign exporter has engaged the foreign shipper

AI Summary

GST on Ocean Freight: RCM Applies for FOB Imports with Foreign Shipper, 5% Tax Rate Confirmed. CIF Exempt. A discussion on the applicability of Goods and Services Tax (GST) on ocean freight for import purchases under the Reverse Charge Mechanism (RCM) was initiated by an individual. The query referenced a Supreme Court judgment in the case of Union vs. Mohit Minerals. Responses clarified that if goods are imported on a Cost, Insurance, and Freight (CIF) basis, RCM does not apply, while for Free on Board (FOB) basis, GST must be discharged under RCM if the shipper is a foreign entity not registered in India. The applicable tax rate is 5% on the actual freight amount.