GST on on carriage for Clearing & Forwarding Agent

GST on on carriage for Clearing & Forwarding Agent

Dear Sir,
We are a clearing & Forwarding Agent and having query about the GST on On- Carrage:
As per GST latest amendment the GST on Air and See freight has been exempted by the Government.

My query is since Air & Sea freight has been exempted by the Government do the GST we were paying on transportation charges from foreign port to the final destination will also be exempted.
 Illustration
   - We are sending shipment of one of our exporter from India to Afghanistan.
   - Movement of shipment will be as follows:
   - From Indian port to Iran port by sea - This part of        services now exempt
   - From Iran port to Afghanistan by Truck - Please advise whether this part is also exempt or Taxable
The bill will be raised in favor of the Indian Shipper/Exporter.

     
:

Asked 7 years ago in GST

Hi,

Basis the description given by you, the other part of the service shall also be exempt because the services are being provided outside India.

Thanks

Damini

Damini Agarwal

CA, Bangalore

504 Answers

31 Consultations

Talk to Damini Agarwal

As an agent you are laible to obtain registration under GST and liable to pay tax on the invoice value. The above service is taxable as you are supplying services to Indian exporter irrespective of foreign destination of goods.

Vivek Kumar Arora

CA, Delhi

Available Now

5012 Answers

1135 Consultations

Talk to Vivek Kumar Arora NOW!

Hi,

As per the meeting of GST Council held on 18.01.2018, it has been decided to exempt the following from the GST:

1) Services by way of transportation of goods from India to a place outside India by air

2) Services by way of transportation of goods from India to a place outside India by sea

In addition to the above, the following has also been mentioned:

a) That value of such services may be excluded from the value of exempted services for the purpose of reversal of ITC

b) The above exemptions may be granted with a sunset clause upto 30th September, 2018

As such, inferring from the above and co-relating it with your query, it seems that the transportation of goods from the foreign port to the final destination by road has not been mentioned anywhere for exemption. As such, the same should be taxable.

However, looking at the intent of the notification, it could be possible that the officials could not have thought of such kind of situation where goods at foreign site can be transported by way of road also. As such, you have a case to claim exemption by including the fare charge in the consolidated fare and making the representation for the same.

Please note that as you have mentioned that the consolidated bill shall be raised in favor of Indian Shipper/ Exporter, which should be taken care of.

Also, please note that this is advisory only and the law is clear that road transportation outside India is not exempt.

Regards,

Sunny Thakral

CA, Delhi

231 Answers

8 Consultations

Talk to Sunny Thakral

Hi,

The exemption is provided in case where goods are getting shipped from India to outside India. There is no exemption when goods are shipped from outside Indian to final destination.

However, if you raise a consolidated bill in above situation and don't show the bifrucation between two fares, there is a possibility of claiming the exemption.

Please feel free to call/ revert in case you need more clarity.

Thanks and regards

Abhishek Dugar

CA CS B.Com