TaxTMI 
TaxTMI 
2020 (12) TMI 1304
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....erence to such a similar provision under the CGST or MP GST Act would he mentioned as being under the GST Act. 3. BRIEF FACTS OF THE CASE - 3.1. Khaitan Chemical and Fertiliser (hereinafter referred to as "the Applicant") is engaged in the manufacturing of Single Super Phosphate (Fertilizer). Sulphuric Acid (Chemical). For the manufacture of Single Super Phosphate (SSP). the major raw material required is Rock Phosphate which is imported from various countries like Egypt, Jordan & Morocco and also procured locally within country. The company is registered under the GST laws for payments of GST/IGST besides being paying the customs duty on import of Rock Phosphate. 3.2. The applicant is registered under the MPGST/CGST Act 2017 vide GSTIN-23AAACK2342QIZI. 4. QUESTION RAISED BEFORE THE AUTHORITY - The below question have been Formed in relation to the services being provided by applicant to the recipients: 4.1. Double-taxation on freight portion of imported goods- 4.1.1. Goods imported and IGST levied on CIF Value (which includes freight) Basic Custom Duty + Social Welfare Cess. 4.1.2. IGST levied again on the freight component (Ocean Freight) on re....
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....uld he liable to integrated tax, on the value as determined under Section 3(8). • As per Section 3(8) of the Customs Tariff Act, 1975. the value of imported article for the purpose of1GST shall he the aggregate of value of imported article under Section 14 (1) of the Customs Act and shall include all duties of customs excluding IGST and compensation cess. • As per Sec. 14 of the Customs Act. 1962. the value of the imported goods shall be the transaction value of such goods. • As per Customs Valuation (Determination of Value of Imported Goods) Rules. 2007, transaction value shall include. in addition to the price as aforesaid. am amount paid or payable for costs and services, including commissions and brokerage. engineering, design work. royalties and licence fees, costs of transportation to the place of importation, insurance, loading, unloading and handling charges. Thus. with regards to the above sections of various acts. on importation of goods. IGST shall he levied on the sum of CIF (Cost. insurance & Freight) value of the goods and all duties of customs. 5.5. The company, at the time of importation. pays Customs Duty on the CI....
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....therefore. the above-mentioned deeming fiction For the value of freight is applied. As per this deeming fiction. 10% of the CIF value is considered to be the Ocean Freight and hence IGST is again paid (on reverse charge basis) on this 10% value of CIF. 5.8. Thus. the company is paying the IGST twice on the same amount. Firstly. IGST on the CIF Value + Customs Duty and secondly on the Ocean Freight which is 10% of the CIF Value. This is amounting to double taxation on freight portion of imported goods. • Goods imported and 1GST levied on CIF Value (which includes freight) + Basic Custom Duty + Social Welfare Cess. • IGST levied again on the freight component (Ocean Freight) on reverse charge basis. In such circumstances, to levy and collect once again the Integrated Tax under the same Act on the 'supply' (same aspect) amounts to double taxation. 5.9. There have been various cases on the same matter of double taxation of Ocean Freight. One of the notable cases was Mohit Minerals Pvt. Ltd. vs Union of India. In this case. the company is engaged in importing non-cooking coal from Indonesia. South Africa and U.S.A. and supplying it to various domestic ....
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..... in Mohit Minerals Pvt. Ltd. vs Union of India (Gujarat high Court). the applicants have challenged the levy of the IGST on the estimated component of the Ocean Freight paid for the transportation of the goods by the the foreign seller as sought to be levied and collected from the applicants as the importer of the goods. Gujarat High Court in this matter pronounced the judgement that as per section 14 of Customs Act. assessable value of goods includes freight amount which represent the expenditure on transportation of goods. IGST is already paid on freight element by including it in assessable value. Therefore. payment of IGST separately on the ocean freight will amount to double taxation. Thus. IGST cannot be imposed on the same freight amount by treating it as a supply of service since freight also suffers IGST as a part of the assessable value of imported goods. This is necessary to avoid the vice of double taxation. Therefore. considering the IGST paid twice on Ocean Freight (once on total CIF value and again on deemed 10% of CIF Value) and also the judgement of Gujarat High Court. we are seeking your clarification in this matter of double-taxation and allow us to not make any....
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.... of the Integrated Goods and Services Tax Act, 2017 (IGST Act) read with Section 97 of the Central Goods and Services Tax Act, 2017 (CGST Act). an application for advance ruling can be made only if the question is in respect of any of the following: a. Classification of any goods or services or both b. Applicability of a notification issued under the provisions of this Act c. Determination of time and value of supply of goods or services or both d. Admissibility of input tax credit of tax paid or deemed to have been paid e. Determination of the liability to pay tax on any goods or services or both f. Whether applicant is required to be registered g. Whether any particular thing done by the applicant with respect to any goods or services or both amounts to or results in a supply of goods or services or both, within the meaning of that term. 6.3. The applicant in the Advance Ruling has submitted that the present application is in respect of a question about determination of the liability to pay tax on any goods or services or both. thus the question can only he in context of the GST laws. 6.4. In their application. ....