GST on ocean freight for transportation of goods in a vessel from a non-taxable to taxable territory

By Editor2 Goods and Services Tax Judiciary February 22, 2019 1 comment

TaxGuru Citation: 2019 taxguru.in 2107
Case Name: In re Indian Potash Limited (GST AAR Andhra Pradesh)
Appeal Number: Only available for paid members
Date of Judgement/Order: Only available for paid members
Courts: AAR/AAAR Andhra Pradesh, Advance Rulings

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In re Indian Potash Limited (GST AAR Andhra Pradesh)

The transportation of goods in a vessel from a non-taxable territory to taxable territory amounts to import of service and such ocean freight is leviable to IGST as an inter-state supply of service and the Applicant, being the importer, are liable to pay IGST under reverse charge mechanism prescribed vide Notification No. 10/2017 -Integrated tax (Rate) dated 28.06.2017, by following the valuation as per Notification No.8/2017-Integrated Tax (Rate), dated 28-6-2017, irrespective of valuation adopted for the import of goods i.e. FOB or CIF.

The issues raised on double taxation, subsidies and cascading effect leading to accumulation of credit fall beyond the purview of Section 97 of CGST / APGST Act,2017.

FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING, ANDHRA PRADESH

ORDER

(Under sub-section (4) of Section 98 of Central Goods and Services Tax Act, 2017 and sub- section (4) of Section 98 of Andhra Pradesh Goods and Services Tax Act, 2017)

1. The present application has been filed u/s 97 of the Central Goods & Services Tax Act, 2017 and AP Goods & Services Tax Act, 2017 (hereinafter referred to CGST Act and APGST Act respectively) by M/s Indian Potash Limited., (hereinafter referred to as applicant), registered under the Goods & Services Tax.

2. The provisions of the CGST Act and APGST Act are identical, except for certain provisions. Therefore, unless a specific mention of the dissimilar provision is made, a reference to the CGST Act would also mean a reference to the same provision under the APGST Act. Further, henceforth, for the purposes of this Advance Ruling, a reference to such a similar provision under the CGST or AP GST Act would be mentioned taxguru.in as being under the GST Act.

3. Brief Facts of the case:

M/s Indian Potash Limited (hereinafter referred to as “IPL”, or “Company” or “Applicant” as required by the context) holding Goods and Services Tax (‘GST’) Registration No. 37AAACI0888H1ZF, incorporated in June 1955 having principal place of business at 71-67 4/1 Exim Park, Behind Airport, IV/VA, Port Area, Visakhapatnam, Andhra Pradesh 530012 are registered taxable person. The applicant is engaged in import-handling, promotion and marketing of fertiliser in the entire country.

The Applicant informed inter-alia, that;-