Explore GST rules for ocean freight in India, including the 2023 exemption and CIF vs. FOB implications. Learn about the landmark Mohit Minerals judgment.
GST on ocean freight changed after the Supreme Court’s Mohit Minerals ruling, which held the reverse charge on import (CIF) ocean freight to be unconstitutional. As a result, no separate GST under RCM applies on such import freight, while domestic freight is taxed at the applicable rate and export freight is treated as zero-rated.
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Frequently Asked Questions (FAQ)
Is GST payable on ocean freight for imports?
Following the Supreme Court’s decision in the Mohit Minerals case, the reverse charge on import (CIF) ocean freight was held unconstitutional, so no separate GST under RCM is payable on such freight.
What was the Mohit Minerals ruling?
The Supreme Court held that levying GST under reverse charge on ocean freight for CIF imports amounted to double taxation and was unconstitutional, striking down that levy.
Is GST charged on domestic ocean freight?
Yes. Freight for the domestic transport of goods by sea is taxable at the applicable GST rate, unlike the struck-down RCM on import ocean freight.
How is export ocean freight treated?
Freight relating to the export of goods is generally treated as zero-rated or exempt, subject to the conditions in force at the relevant time.
