No RCM on Ocean freight, and Council's recommendation has no binding on union and state govts- Apex Court
.png)
In a significant verdict, the Supreme Court on Thursday 19th May 2022, in case of Union of India versus M/s Mohit Minerals made two things clear A) NO Reverse Charge Mechanism on Ocean Freight: Tax Department's appeals on applicability of Reverse Charge Mechanism on Ocean Freight is dismissed. The bench was deciding a bunch of appeals filed by the Union of India against a judgment of the Gujarat High Court in which the issue was whether an Indian importer can be subject to the levy of Integrated Goods and Services Tax on the component of ocean freight paid by the foreign seller to a foreign shipping line, on a reverse charge basis. Prior to the GST regime, service tax on ocean freight was exempted. However, the exemption was lifted by notifications issued in 2017 to levy service on the importer, by a reverse charge mechanism. A division bench of the Gujarat High Court quashed the notifications as unconstitutional for exceeding the powers conferred by the IGST Act and the CGS...