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SC verdict on GST Council: Importers to save on 5% IGST on ocean freight

SC said the impugned levy imposed on the 'service' aspect of the transaction is in violation of the principle of 'composite supply' enshrined under Section 2(30) read with Section 8 of the CGST Act

economy, export, transport, trade
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In a CIF transaction, the foreign exporter enters into a contract with a foreign shipping line | Photo: Bloomberg

Asit Ranjan Mishra New Delhi
Now, Indian importers will not have to pay the 5 per cent integrated goods and services (IGST) levy on shipping charges known as ocean freight after the Supreme Court judgment struck down the levy on Thursday.

The Supreme Court in its judgment said the impugned levy imposed on the “service” aspect of the transaction is in violation of the principle of “composite supply” enshrined under Section 2(30) read with Section 8 of the CGST Act.

“Since the Indian importers are liable to pay IGST on the “composite supply”, comprising supply of goods and supply of services of transportation, insurance, etc,

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First Published: May 20 2022 | 6:02 AM IST

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