Introduction:
In our 45th Volume (April 2018 edition) of our wiki, we have authored an article titled “GST on Shipping Services— the unwarranted turmoil” on GST implications over the services by way of transport of goods by vessel. It has been explained by us that the ocean freight and air cargo freight were not subject to tax for the reason that the tax is collected in the form of customs duties by including these costs in the value of goods. However, levy of service tax on services by way of transport of goods by vessel has been brought in with effect from 01.06.2016 in order to provide level playing field to Indian shippers compared to foreign shippers.
It was explained therein that the Indian importers are bearing the input tax burden on various goods and services received by them for providing their services and as a result of this, their cost of services has been increased compared to foreign suppliers. Accordingly, the levy was brought on these services so that they can collect tax from the customers and adjust the input taxes while paying the output tax.
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