DGGI rescinds ₹3,000 crore GST demand for foreign shipping firms, 2017-18.
In a significant relief to foreign shipping companies operating in India, the Directorate General of Goods and Services Tax Intelligence (DGGI) has withdrawn a tax demand of approximately ₹3,000 crore for the financial year 2017-18. The relief benefits 18 foreign firms, including major shipping lines like Maersk, Orient Overseas Container Line, and Hapag-Lloyd Mediterranean Shipping.
The tax demand was rescinded after these companies assured authorities that no services had been imported during the 2017-18 period. However, the DGGI’s investigation, which began in October 2023, continues for subsequent years, with tax demands still in place.
The probe focuses on potential GST non-payment under the reverse charge mechanism by Indian branches of foreign shipping companies and airlines for services like aircraft rental and crew salaries paid abroad. The GST Council’s fitment committee will determine the applicability of tax exemptions for these services in later years.
Meanwhile, the DGGI has uncovered GST tax evasion amounting to ₹1.2 trillion due to fake input tax credit (ITC) misuse since 2020, highlighting ongoing efforts to dismantle fraudulent activities within the GST system.
Source: The Economic Times
