Indian government exempts ocean freight imports from GST

The Indian government has announced that it will exempt payments made for goods imported through ocean freight from the 5% integrated GST (IGST), effective from October 1, 2023. This move comes in line with a Supreme Court ruling in May 2022, which held that a separate levy on the Indian importer for the “supply of services” by the shipping line would be in violation of the GST Act.

Under the current system, importers are required to pay 5% GST on ocean freight imports under the Reverse Charge Mechanism (RCM). This means that the importer is liable to pay the GST on behalf of the supplier, who is typically a foreign company.

The exemption of ocean freight imports from GST is a welcome move for the Indian import industry, as it will reduce the cost of doing business. It is also expected to boost India”s trade competitiveness.

This is a good thing for Indian importers, as it will make it cheaper for them to import goods. It is also expected to make Indian exports more competitive in the global market.