In Scenario 5(Normal Case) Maintained by V2Technosys.com, Taxguru Consultancy & Online Publication LLP, 509, Swapna Siddhi, Akurli Road, Near Railway Station, Kandivali (East), HC explains Parallel enquiries on same GST issues by State & CGST authorities, SC directs Bombay HC to hear issue of short tenure of 2 years for Members of Sales Tax Tribunal, One Time Settlement Scheme under Punjab VAT Act & CST Act, Tax liability on supply of CNG from retail outlet under GST regime, Formulation of Principles for Determining a Supply for Levy of GST, Synopsis of the Companies (Amendment) Act, 2020, No reassessment for mere change of opinion by the AO, Income from sale of software constitutes business income instead of royalty in absence of PE, No TDS if no separate payment made for purchase of software embedded in mobile phones, Sale of items by claiming miraculous or supernatural powers via advertisement on TV channels was illegal, HC issued directions to Police for Complaints / FIRs filed on Economic Offences must be disposed of properly, Section 80IC Deduction on interest earned from fixed deposits allowable, SVLDR: Designated Committee cannot revisit the issue after determination, FM launches Union Budget Mobile App; Final stage of Union Budget 2021-22 commences with Halwa Ceremony, Join Online Live GST Certification Course by CA Raman Singla, New Process to Submit Response for Income Tax Refund, Taxpayers! As per section 194J, the TDS (Tax Deduction at Source) is applicable on fees for professional or technical services. In normal cases GST liability to be discharged on forward basis and as per Notification No 8/2017 IGST (Rate) the rate of GST is 5%. Hello 28-06-2017. Thanks, Hello ocean freight for export is gst chargable on this because notification shows exempt till 30.09.2018. after this is there a new notification for this exemption, After reading this article, i got very clarity on the topic. Gst exemption on ocean freight was applicable till 30.09.2018. do we have notofication that this has been extended . ), it has been held that payment of ocean freight and Inland haulage charges cannot be subjected to TDS by virtue of the provisions of section 172 of the Act, which position is clarified by CBDT Circular No.723 dated 19.09.1995. The rate of GST needs to be discharged on the freight amount is 5% in accordance with notification 8/2017 – IGST (Rate). Interest Saga- Gross Vs. Net GST Liability, Sabka Vishwas Legacy Dispute Resolution Scheme, 2019- FAQs, Sample Management Representation Letter for GST Audit, Analysis of clarifications on filing of Annual Return (FORM GSTR-9), HC explains Parallel enquiries on same GST issues by State & CGST authorities, SC directs Bombay HC to hear issue of short tenure of 2 years for Members of Sales Tax Tribunal, One Time Settlement Scheme under Punjab VAT Act & CST Act, Tax liability on supply of CNG from retail outlet under GST regime, Formulation of Principles for Determining a Supply for Levy of GST, Synopsis of the Companies (Amendment) Act, 2020, No reassessment for mere change of opinion by the AO, Income from sale of software constitutes business income instead of royalty in absence of PE, No TDS if no separate payment made for purchase of software embedded in mobile phones, Sale of items by claiming miraculous or supernatural powers via advertisement on TV channels was illegal, HC issued directions to Police for Complaints / FIRs filed on Economic Offences must be disposed of properly, Section 80IC Deduction on interest earned from fixed deposits allowable, SVLDR: Designated Committee cannot revisit the issue after determination, FM launches Union Budget Mobile App; Final stage of Union Budget 2021-22 commences with Halwa Ceremony, Join Online Live GST Certification Course by CA Raman Singla, New Process to Submit Response for Income Tax Refund, Taxpayers! All Rights Reserved. 3) Whether to pay IGST or CGST + SGST? Service specific exemption relating to Ocean freight relating to Exports. My Question is whether recipient can claim input tax credit (GST paid @ 5% on Ocean Freight). Some department people are still asking to pay service tax on ocean freight under reverse charge mechanism during their audit without looking behind agreements/arrangements between export and importer. As the importer is not a party to the contract of transportation hence, he will not be aware of the value of service. 19 November 2007 TDS is not applicable on Ocean Freight. The assessee-company merely acted on behalf of M/s. Exemption for Transportation of goods in a vessel in case of export of goods: Waves in the Taxability of ocean freight -Part I. We all have heard the slogan, “GST: One Nation, One Tax“. It provided that income of a non-resident assessee engaged in the business of operation of ships, 7.5% of the gross freight will be deemed to be profits and gains chargeable to tax under the head “Profits and gains of business or profession”. A Oct’19 Introduction: The shipping industry is a vital part of global freight transportation which caters global trade supply-chain. Further recent Advance Ruling, by Uttarakhand State in the matter of M/s Bahl Paper Mills Limited, ruled that an importer is required to pay IGST on CIF (Cost-Insurance-Freight) value of imported goods. As per entry number 19B of Notification No 21/2019 of CGST Act, 2017, “Services by way of transportation of goods by a vessel from customs station of clearance in India to a place outside India” exempt from GST.. The DTAA specifies that if you are paying a non-resident for services (such as a carrier for your freight), the Indian government will consider the amount of taxes you will pay to the operator of the freight shipping vessel to avoid double … Some ocean freight will not require you to deduct the TDS tax from the shipping process. Ocean shipping has brought numerous worldwide economic benefits. Raiser Pvt. 1. 2/2018- Integrated Tax (Rate) Dated 25-01-2018 and Notification No. hireshdesai February 22, 2013 March 10, 2013 Income Tax. Click here to login now . Raiser Pvt. OceanX is a non – exclusive global network of leading ocean freight providers and NVOCCs dedicated to delivering bespoke innovative solutions, in particular on FCL services, LCL consolidation, dangerous goods and chemical logistics, temperature control, as well as project cargo handling. Notification 8/2017-Integrated Tax dated 28-07-2017 read along with corrigendum dated 30-07-2017 specifies that the value shall be 10% of CIF Value. TDS not deductible on freight chargers shown separately in Goods Purchase Bill. (v) the supplier of service and the recipient of service are not merely establishments of a distinct person in accordance with Explanation 1 in section 8; If all the above conditions satisfied Scenario 3 will become Export of service and we can avail all the benefits available for Exports like SEIS scripts otherwise it is service specific exemption. He said the CHA on behalf of client do the following service mainly freight charges, warehouse charges, survey charges, transportation cost , inspection charges etc. Thanks you Ms.Pragya Singh Rajpurohit, Your email address will not be published. CIT v. Bhagwati Steels - (Punjab & Haryana HC) - In the instant case, it was held that . Products are packed into large containers which are loaded onto vessels sailed to the destination country. If the Shipper is non resident, then the recipient shall pay GST under RCM in terms of Section 5(3) of the IGST Act, 2017 read with sl.no. RCM liability to be discharged on Ocean freight relating to Imports (Deemed ocean freight. Notification No. 2. 15/2018-Integrated Tax (Rate) dated 26-07-2018 read with Notification No. (a) where a consideration is payable for the supply of goods or services or both, the person who is liable to pay that consideration; (b) where no consideration is payable for the supply of goods, the person to whom the goods are delivered or made available, or to whom possession or use of the goods is given or made available; and. 02. Date of Judgement/Order : 26/06/2020. TDS on event management expenses - 194C or 194J - the payments were essentially for domestic ticketing, reimbursing hotel expenses, tour leaders’ expenses which were essentially in the nature of travel agent who had arranged the ticket booking and hotel facilities and not for any technical services availed by the assessee - TDS u/s 194C - No question of law arises 10/2017 – IGST Act, 2017, “With respect to services supplied by a person located in non-taxable territory by way of transportation of goods by a vessel from a place outside India up to the customs station of clearance in India”, the liability to discharge GST under reverse charge would be on the importer, located in the taxable territory. 1. 9. In contrast, as per Section 5(3) of IGST Act, 2017 government can by notification specify the supply of goods or service on which the tax would be payable under reverse charge by the ‘recipient’ of supply. It is also submitted that since no amount of freight is received in India and assessee-company remitted the … The Central Board of Indirect Taxes and Customs (CBIC) extended the exemption on 2 types of transportation Services. 10 of Notification 10/2017-Integrated Tax (Rate) ,dt. 781/Lkw/2017. The value of ocean freight would be deemed as 10% of the CIF Value, when the freight amount not known. Hence it was open for the government to notify either the service receiver or any other person. 4. Ocean Freight is generally incurred in the course of an international purchase or sale transaction. Service specific exemption relating to Ocean freight relating to Exports. Section 172 of the Income Tax Act, 1961 (‘the Act’) overriding all other provisions of the Act provides for procedure of levy and recovery of tax in case of any ship belonging … The ocean freight amount is separately shown in the bill of entry. Nothing contained in this serial number shall apply after the 30th day of September, 2020. Section 2(93) of the CGST Act defines ‘receipient’ of supply as under, “recipient” of supply of goods or services or both, means—. No Tax Deducted at Source (TDS) shall be charged from the shipping agents on export freights, says Gujarat High Courts. However as per Section 5(3) of the IGST Act, 2017 read with sl. It’s taxation has been under numerous changes since Service Tax regime. TDS on courier charges is required to be deducted under Section 194C of Income Tax Act 1961 at the rate of 1% or 2% (as the case may be) for payments to residents. Ocean Freight Taxation – Pre GST. As per entry number 19B of Notification No 21/2019 of CGST Act, 2017, “Services by way of transportation of goods by a vessel from customs station of clearance in India to a place outside India” exempt from GST. I had also gone through Sec 172 which states that there would be no TDS on ocean freight paid to a foreign shipping company orits agent. 28-06-2017. if any services are supplied by a person located in non- taxable territory by way of transportation of goods by a vessel from a place outside India up to the customs station of clearance in India to a person in non taxable territory the GST under Reverse Charge shall be payable by the importer, as defined in clause (26) of section 2 of the Customs Act, 1962(52 of 1962), located in the taxable territory. Besides, the ITAT noted only one of the five bills on record and therefore incorrectly concluded that the freight charges were only ₹ 1,25,272/- and the payment of ₹2,05,660/- had no nexus with the reimbursement of freight charges. GST Liability discharge under forward charge Recently hon’ble Gujarat High Court in the landmark judgment in case of [2020] 113 taxmann.com 436 (Gujarat) M/s.Mohit Mineral Pvt. As per subsection (6) of section 2 of IGST Act,2017 “export of services” means the supply of any service when. Scenario 1, 2, covered under above entry hence the services are exempt under GST regime. Archana answered over 5 years ago Hie Niru, Under section 194C, if payment is made to shipping agents of non resident ship owners, since the agent acts on behalf of non resident ship owner or Charterer, there is no TDS attracted., otherwise if paid to a resident TDS is attracted on freight payment. 11 July 2013 TDS NOT APPLICABLE 194C: All the above said expenses was Generally re-reimbursement in nature by providing original bills paid by him and Hence TDS not applicable...if Separate invoice available for all these expenses Then TDS Not applicable..As per CBDT Cir.715 dated 08.08.1995 And TDS will be applicable on his service charges ONLY. Aware of the underlying activity I.e, 2, covered under above entry hence service receiver or other... 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