Tavrur Oils And Fats Pvt Ltd Vs Commissioner Central Goods And Service Tax & Anr. (Delhi High Court)
Delhi High Court held that levy of Integrated Goods and Services Tax (IGST) on ocean freight is unconstitutional. Accordingly, directed department to refund service tax paid on ocean freight during April to June 2017.
Facts- The petitioners in these matters have instituted the instant writ petitions seeking the issuance of a writ of mandamus commanding the respondents to refund the service tax paid by them on ocean freight during the period April 2017 to June 2017.
The petitioners contend that in international trade and where the subject matter be a Cost, Insurance and Freight contract, the overseas supplier would engage a vessel owner for transportation of goods to India. In such situations, the appointment of the vessel as well as payment of transportation charges are borne by the overseas supplier. It is these transportation charges incurred in transporting goods by a vessel or ship which is commonly known as ocean freight. In the case of a Free On Board contract, the solitary distinction is that the ocean freight liability is to be borne by the local importer.
Conclusion- Supreme Court Union of India and Anr. vs Mohit Minerals Pvt. Ltd. has held that the collection of Integrated Goods and Services Tax on ocean freight would violate the provisions of the Central Goods and Services Tax Act, 2017 and be unconstitutional.
