Applicant is engaged in manufacturing of edible oil for which it imports goods and use those in manufacturing of edible oil. Goods are imported on CIF basis (Cost Insurance and Freight) and thus, assessee pays IGST on CIF value at the time of filing of bill of entry of goods imported.
As per notification 10/2017 read with notification 8/2017 and corrigendum to it, importer is required to pay IGST on reverse charge on services received by him of transportation of goods through vessel by a person located outside India till location of custom stations in India; and for this purpose taxable value shall be taken to be 10% of CIF value.
Assessee contends that by doing this he ends up by paying double tax on amount of ocean freight, as he paid IGST on goods imported on a value which includes amount of freight and another on services of ocean freight under reverse charge.
Authority for advance ruling ruled that there is no ambiguity in law with respect to this matter and assessee shall pay IGST on ocean freight expense irrespective of fact that freight was included in CIF value.
Source: Authority for advance ruling-Madhya Pradesh-E-DP Marketing Private Limited dated 02-5-2019
