Input Tax credit on Export ocean freight charged by Shipping line @ 5% to Exporter of goods

[Ripen Sahu]

Whether an exporter of goods is eligible to avail Input Tax Credit (ITC) of GST charged at 5% on ocean freight by the shipping line, and if so, whether such ITC can be utilized for claiming a refund or for set-off against output tax liability. Further, whether the restriction of ITC in case of concessional GST rate (5%) is applicable only to the supplier (shipping line) or also extends to the recipient (exporter of goods). Additionally, whether ITC to the exporter is available only in cases where the shipping line charges GST at 18%, thereby restricting credit eligibility when GST is charged at 5%

AI Summary

Input tax credit on ocean freight remains available to exporters even at a concessional GST rate.
Input tax credit is available to an exporter receiving ocean freight services even where GST is charged at 5%, if the CGST Act conditions are met. Ocean freight used for export is treated as an input service for zero-rated supplies, allowing set-off against output tax liability or refund of unutilized credit. The 5% concessional rate restricts the supplier's credit entitlement and does not, by itself, deny credit to the exporter; availability of credit does not depend on whether GST is charged at 5% or 18%.