Under this situation, 1) On what value GST is to be paid under reverse charge by the importer? 3. We pick up your cargo. It is also submitted that since no amount of freight is received in India and assessee-company remitted the … For this we are paying ocean freight to an indian company. Income-tax Act on freight charges reimbursed to the supplier 14 July 2016 Background Recently, the Calcutta High Court in the case of Hightension Switchgears Private Limited1 (the taxpayer) held that the taxpayer is not liable to deduct tax at source under Section 194C of the Income-tax Act, 1961 (the Act) on freight charges reimbursed to the supplier. Products are packed into large containers which are loaded onto vessels sailed to the destination country. the importer is liable to arrange for the transportation services. An importer is already liable to pay customs duty (BCD+IGST+any other cess as applicable) on CIF value of goods, paying RCM on the freight cost would mean that the freight value is TAXED TWICE. Notification No. or upto 30000 single Contract per … He pointed out that in addition to this one bill, there were four other bills and the amounts therein totalled upto ₹ 2,05,660/-. Next. Whether this is acheived in true spirit or not, we have definitely achieved “GST: ONE TRANSACTION, DUAL TAX” in relation to Ocean Freight.What was “doubly taxed” in Service Tax regime is still “doubly taxed”. Taxability for different scenarios when both Service receiver and liner/agent are within India, outside India, one in India and another in outside India. The assessee-company contended that it was not required to deduct TDS and cited a number of case laws to support the view and amounts paid to the agents were reimbursed to the assessee-company by the parties. Now my question is whether we should deduct TDS U/S194C for paying ocean freight? 2. As per section 194CTDS is to be deducted on Contractors at 1% in case of (Individual / HUF) and Single Contract at 2% on (Partnership / Companies)However, No TDS is to be deducted if annual expense is upto 100000 p.a. By the terms “Ocean Freight“, I am referring to transportation service of goods through vessel. Okay! Exemption for Transportation of goods in a vessel in case of export of goods: Waves in the Taxability of ocean freight -Part I. Hello 1. About 90 percent of everything we buy comes through ocean transport. 4. 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Raiser Pvt. The respondent to the case, Summit India Water Treatment filed ITR for Assessment Year 2013-14. In this article, we try to cover the taxability of ocean freight in different scenarios under GST, For our discussion Ocean freight is divided into two types based on destination of goods/Cargo namely. If the Shipper is non resident, then the recipient shall pay GST under RCM in terms of Section 5(3) of the IGST Act, 2017 read with sl.no. If yes please share. Some ocean freight will not require you to deduct the TDS tax from the shipping process. Related Assessment Year : 2013-14. Pl detail with relevant notification pl, For Intermediary who provide services to importer so is it liable to pay reverse charge on ocean freight and kindly advise the place of supply for intermediary, Your email address will not be published. 2/2018- Integrated Tax (Rate) Dated 25-01-2018 and Notification No. As the importer is not a party to the contract of transportation hence, he will not be aware of the value of service. Notification 8/2017-Integrated Tax dated 28-07-2017 read along with corrigendum dated 30-07-2017 specifies that the value shall be 10% of CIF Value. But in the present case, I need to know about TDS on ocean freight paid to an Indian company when its PAN is available. Export of Goods from India on FOB Basis, 8. Next . if indian company is agent then TDS not applicable. If he charters a shipper resident in India, then it shall be an export of service by the shipper subject to other conditions. Raiser Pvt. (v) the supplier of service and the recipient of service are not merely establishments of a distinct person in accordance with Explanation 1 in section 8; If all the above conditions satisfied Scenario 3 will become Export of service and we can avail all the benefits available for Exports like SEIS scripts otherwise it is service specific exemption. TaxGuruEdu, an educational wing of Taxguru bring you the best in class Online Crash Course on GST and Income Tax by TaxGuru Edu. Besides, the ITAT noted only one of the five bills on record and therefore incorrectly concluded that the freight charges were only ₹ 1,25,272/- and the payment of ₹2,05,660/- had no nexus with the reimbursement of freight charges. Furnish GSTR-1 in time, or pay late fees, Webinar on Career Growth in GST related Litigation Management, Extend timelines for filings by LLPs: ICSI, Goods and Service Tax (GST) Registration & Requirements, Uttarakhand HC directs CBDT to consider representation on due date extension, All India Protest Call against GST/Income Tax Issues by WMTPA. 1. "Need assistance" Contact us 88-99-11-77-01 info@taxguruedu.com. Export of Goods from India on CIF/CNF Basis. Is TDS deduct on ocean freight charged by Logistic pvt. 19 November 2007 TDS is not applicable on Ocean Freight. We are also presently having the enquriy u/s 201, upon Scruitiny of accounts the tax officer has raised the query why tds on CHA has been deducted @2% as this should fall under section 194J. 11 July 2013 TDS NOT APPLICABLE 194C: All the above said expenses was Generally re-reimbursement in nature by providing original bills paid by him and Hence TDS not applicable...if Separate invoice available for all these expenses Then TDS Not applicable..As per CBDT Cir.715 dated 08.08.1995 And TDS will be applicable on his service charges ONLY. In normal cases GST liability to be discharged on forward basis and as per Notification No 8/2017 IGST (Rate) the rate of GST is 5%. On this, the Principal Commissioner of tax issued a challenging order u/s 263 of Income Tax Act 1961, on the basis which the assesses company has paid the export freight to the Inter Ocean Shipping … Scenario 6, 8 covered under above entry hence service receiver needs to discharge RCM liability on ocean freight. 02. 15/2018-Integrated Tax (Rate) dated 26-07-2018 read with Notification No. But if we enter into a contract with the shipping agent wherein all the goods shall be shipped through him then TDS shall be deducted u/s 194C No Tax Deducted at Source (TDS) shall be charged from the shipping agents on export freights, says Gujarat High Courts. 28-06-2017. 3) Whether to pay IGST or CGST + SGST? Section 172 of the Income Tax Act, 1961 (‘the Act’) overriding all other provisions of the Act provides for procedure of levy and recovery of tax in case of any ship belonging … 4 Thereafter, the Principal Commissioner of Income Tax [for short, ‘the PCIT’] invoked power of revision under Section 263 of the Act, 1961 on the ground that without deducting TDS on the export freight, the assessee company had paid export freight amounting to Rs.2,03,66,683/­ to Inter Ocean Shipping and Logistic Services. Join our newsletter to stay updated on Taxation and Corporate Law. Read on…. … Furnish GSTR-1 in time, or pay late fees, Webinar on Career Growth in GST related Litigation Management, Extend timelines for filings by LLPs: ICSI, Goods and Service Tax (GST) Registration & Requirements, Uttarakhand HC directs CBDT to consider representation on due date extension, All India Protest Call against GST/Income Tax Issues by WMTPA, Service specific exemption up to Sep 2020, Export of service / if all the conditions not satisfied, then service specific exemption, GST liability charged @ 5% under forward charge, RCM liability to be discharged on freight paid by the service receiver, GST liability to be discharged by the importer under RCM – by considering 10% of CIF value as ocean freight, Ocean freight in respect to Imports of goods, Ocean freight in respect to Exports of goods. Join our newsletter to stay updated on Taxation and Corporate Law. 01. Taxation would depend upon the nature of the underlying activity I.e. Service specific exemption relating to Ocean freight relating to Exports. Scenario 5, 7 covered under this entry hence GST liability discharged on forward charge basis. Want to know how? As per section 194J, the TDS (Tax Deduction at Source) is applicable on fees for professional or technical services. Ltd without deduction of TDS on the presumption that the provisions of section 194C of the Act are not applicable. In contrast, as per Section 5(3) of IGST Act, 2017 government can by notification specify the supply of goods or service on which the tax would be payable under reverse charge by the ‘recipient’ of supply. Of September, 2020 M/s S.S the seller and buyer liability to be service. V. Bhagwati Steels - ( Punjab & Haryana HC ) - in the given link: Waves the... And Corporate Law CA Hemanth Kumar Nagasena AO contention is that railway charges were by... Not deductible on freight chargers shown separately in goods purchase bill that railway charges were by... 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