GST Advisory for Ocean and Air Export Freight, effective 01/10/2022 reg.
There has been substantial uncertainty regarding the prolongation of the sunset clause on GST applicable on air and ocean freight exports notified under 08/2017 Integrated Tax, which expired on September 30, 2022.
AMTOI clarified that no extension had been granted via notification at the time of writing this member circular. In this case, it is obvious that until the extension is correctly notified, the exported air freight and exported ocean freight will be subject to GST at the required rate.
Export Air Freight: Services involve the transportation of goods by aircraft from a customs clearance point in India to a location outside India: The tax rate is set at 18%. -Residual clause (vii) of Notification 8/2017 Serial No. 9-Integrated Tax (Rate)-SAC Code 996531
Export Ocean Freight: Services involving the transportation of goods by a vessel from a customs station in India to a location outside of India. — The tax rate will be 5%. -Clause (ii) of Serial No. 9 of Notification 8/2017-Integrated Tax (Rate) Provided that no credit of input tax levied on commodities utilized in supplying the service (other than ships, vessels, including bulk carriers and tankers) has been taken (condition same as for imported freight services) 996521 SAC Code
“Should there be any more developments on the subject, we will provide the necessary advisory!” Meanwhile, please validate the applicability and rate with your CA/Consultant, “according to a communication from Arun Kumar, Honorary Secretary, AMTOI.
