Date: 24/11/2022

No review petition against SC’s quashing of IGST on ocean freight: CBIC

The Central Board of Indirect Taxes & Customs (CBIC) has decided not to appeal against the Supreme Court’s decision of quashing the imposition of IGST on ocean freight in the Mohit Minerals Case, it is learnt. The CBIC Legal Cell has issued a letter dated Nov. 4, 2022, which informed that the Board has decided that the GST Department will not appeal against the Supreme Court decision in which the Court quashed the imposition of IGST on ocean freight. A plea filed by Mohit Minerals Pvt. Ltd challenging the legality of the CBIC notification was reviewed by a division bench of the Supreme Court, as per a report.
The petition primarily consisted of three parts. First of all, since the petitioner had paid the tax required by the IGST Act on the total amount of imports (including the cost of the ocean freight), the tax on the ocean freight cannot be demanded once more under a separate notification. Second, in CIF contracts, both the service supplier and the service user are located outside of India. Even using the reverse charge mechanism, no tax on such services may be collected. Thirdly, the petitioner is not the service recipient at all in the instance of High Sea sales, yet the petitioner is made to bear the burden of proof as an importer, as per the report.
Source: Exim News Service: New Delhi, Nov. 23