Page 80 - CA Final GST

Badlani Classes

Note IGST : GST on Import via ocean : RCM applies :

Import sea freight – Service provided by foreign charterer/ vessel to foreign exporter-
Taxation: This point applies to:

1- services provided or agreed to be provided by way of transportation of goods by
a vessel from a place outside India upto customs station of clearance in India
(import sea freight)

2- service provider : by a person located in non-taxable territory (foreign shipping
lines)

3- service recipient : to any of the following two-
(a) person located in non-taxable territory (foreign exporter); or
(b) person located in India (Indian importer).

Service liable to tax and not exempt: The import sea freight is liable to GST as place of
supply of import goods is in India. Even though service provider and recipient both are
located in non-taxable territory, service is not exempt under Entry 10 of IGST Exemption
Not. No. 9/2017-IT (Rate).

Person liable to pay tax under RCM is importer [Entry 10 of Not. No. 10/2017 –
Integrated Tax Rate] [only in IGST, as supply is inter-state always]: In case of
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 person liable to pay GST shall be the “importer: as defined in Customs Act

Value of NR-to NR import freight deemed at 10% CIF, if actual value not available:
If value of taxable service provided by a person located in non-taxable territory to 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 is not available with the person
liable for paying integrated tax, same shall be deemed to be 10% of CIF value (sum of cost
, insurance and freight) of imported goods.

It may be noted that this deemed value does not apply if service recipient is Indian
importer; both service provider and recipient must be in non-taxable territory and in that
case, the Indian importer liable to pay GST under RCM.
Entry 19 Services by way of transportation of goods by an aircraft from a place outside India upto
the customs station of clearance in India.
Entry 20 Services by way of transportation by rail or a vessel from one place in India to another of
the following goods –
- relief materials meant for victims of natural or man-made disasters, calamities,
accidents or mishap;
- defence or military equipments;
- newspaper or magazines registered with the Registrar of Newspapers;
- railway equipments or materials;
- agricultural produce;
- milk, salt and food grain including flours, pulses and rice; and
- organic manure.

Note: Rearing of animals is ‘agriculture’ and, accordingly, milk is ‘agricultural produce. Page79
Its transport is already exempt as above.

Central Goods & Services Tax Act, 2017