AAR RAJASTHAN RULES CHAMBAL FERTILISERS LIABLE TO PAY IGST ON OCEAN FREIGHT UNDER REVERSE CHARGE MECHANISM

AAR RAJASTHAN RULES CHAMBAL FERTILISERS LIABLE TO PAY IGST ON OCEAN FREIGHT UNDER REVERSE CHARGE MECHANISM

RAJASTHAN AUTHORITY FOR ADVANCE RULING

GOODS AND SERVICES TAX

Case Title- M/s Chambal Fertilisers & Chemicals Limited

(GST AAR RAJASTHAN)

Advance Ruling No.RAJ/AAR/2018-19/14

Date of Judgment/Order- 25th August 2018

IMPORTANT PARAGRAPHS

The Issue raised by M/s Chambal Fertilisers & Chemicals Limited (here in after referred to as ‘Applicant) is fit to pronounce advance ruling as it falls under ambit of the Section 97(2) (a), it is given as under:
(d) Determination of liabiiy (Spay tax on any goods or services or both.
Further, the applicant being a registered person, GSTIN is 08AAACC9762A1ZT, as per the declaration given by him in Form ARA-01, the issue raised by the applicant is neither pending for proceedings nor proceedings were passed by any authority. Based on the above observations, the application is ‘admitted‘ to pronounce advance ruling.
Para No. 1. SUBMISSION OF THE APPLICANT:
1. The applicant has sought an Advance Ruling on the applicability of Ocean freight Charges and System of double taxation with respect to import of raw materials of fertilizers.

The Applicant is engaged in the trading business of goods like DAP, MOP. The said goods are purchased from a country outside India and imported into India. The applicable rate of IGST (import as well as on sale) on DAP and MOP is 5%. The said goods are imported either on CIR (Cost Insurance and Freight) basis or on FOB (Free on Board) basis.

RULING

a) The applicant is liable to pay IGST on transportation of goods by vessel under Reverse Charge Mechanism (RCM) under Notification, No. 10/2017- Integrated Tax (Rate) dated 28.06.2017.
b) Regarding exclusion of any component of expenditure upon imported goods (Ocean freight) while determining their value at the time of import, the same falls beyond the purview of Section 97 of CGST/RGST Act, 2017.