SEEKING CLARIFICATION PERTAINING TO GST RCM ON OCEAN FREIGHT

[Vishnu Shakya]

Dear Sir/mam

we do import, In FOB contract we ask our CHA to book container, He than book container and issue us Tax invoice from his own firm charging ocean freight with 5% along with other charges.

however in bill of lading freight forwarder name is different not our cha firm, but in BL freight forwarder location is in India.

my query is:  as importer, is RCM applicable on ocean freight, provided freight forwarder location is in India who book the space from shipping line company and than sell to us, also provided we already paid twice IGST on ocean freight one at custom and second when our cha issue us tax invoice charging 5% GST on ocean freight.

[Raam Srinivasan Swaminathan Kalpathi]

Dear Querist

Kindly refer - re Mohit Minerals Ltd (SC) wherein the Notification of the department mandating remittance of freight on RCM was struck down.  This has been accepted by the GST department also and all importers who had previously remitted GST on RCM basis have been applying for refund and these have also been sanctioned i.e. those TPs who are unable to utilise the ITC). 

AI Summary

Reverse charge mechanism on ocean freight inapplicable where import IGST already charged and refunds available. Whether the reverse charge mechanism applies to ocean freight when IGST was already paid at import is contested. The importer paid IGST at customs and was later invoiced GST by a CHA; a judicial decision invalidated the notification imposing RCM on freight and the tax administration has accepted the position, resulting in refund claims being sanctioned for importers who paid GST under RCM and could not utilise ITC.