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

Reverse charge on ocean freight applies where the importer engages a foreign shipper; CIF contracts exclude RCM liability. GST on ocean freight is determined by the contract basis and party engaging the carrier: no RCM liability for the importer under CIF contracts, while RCM applies where the importer engages a foreign shipper or the shipper is unregistered in India; GST under RCM is to be calculated on the actual freight amount and discharged by the importer.