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India: GST levied on ocean freight transportation held unconstitutional

India: GST levied on ocean freight transportation

The Gujarat High Court held that no goods and services tax (GST) is to be imposed on the transportation (ocean freight) and specifically regarding transport services provided by a person outside India on transporting the goods into India.

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The case is Mohit Minerals Pvt. Ltd.


Summary

The taxpayer was engaged in importing coal into India from various countries. The taxpayer discharged (settled) the customs duty at the time of import by paying customs duty on the value of the coal, and this value included ocean freight transportation costs. In addition to the levy of customs duty and the integrated GST at the time of import, the taxpayer as an importer was also required to pay integrated GST on the ocean freight, leading to double taxation on the ocean freight (the amount of transport).

The Gujarat High Court held that no GST can be imposed on ocean freight with regard to the transport services (those provided in the transportation of goods by a vessel from a location outside India to a location inside India).

Read a January 2020 report [PDF 344 KB] prepared by the KPMG member firm in India

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