Forwarded message.
Dear Customer,
Namaste!
As you are aware that the CBIC vide Notification No. 02/2018-Integrated Tax (Rate) released on 25th January 2018, prescribed the exemptions till 30th September 2018 in relation to following outbound international freight, which was further extended till 30th September, 2022 as per the notification no. 07/2021-Integrated Tax (Rate) dated 30th September, 2021:-
a) Service by way of transportation of goods by aircraft from India to a place outside India.
b) Service by way of transportation of goods by a vessel from India to a place outside India.
Subsequent to expiry of validity of said notification and with no further extension i.e. w.e.f. 1st October 2022, the following transaction would be taxable under GST:-
a) Ocean export freight billed to customer in India to be charged at the GST rate of 5%.
b) Air export freight billed to customer in India to be charged at the GST rate of 18%
Additionally, in case of outbound shipments where both the parties, i.e. the location of supplier and recipient is in India, the place of supply shall be determined as per Section 12(8) of the Integrated Goods and Services Tax Act, 2017 (‘IGST Act’). With effect from 1st February 2019, a new proviso has been inserted in Section 12(8) of the IGST Act that States. “Provided that where the transportation of goods is to be place outside India, the place of supply shall be the place of destination of such goods”. So as per proviso of section 12(8) read with section 7(5) of IGST Act, the supply will be subject to IGST with place of supply as 97 – Other territory.
Based on the above provisions, it may be relevant to note that in an event where no further extension is granted to the above exemptions, then IGST shall be charged on all outbound on all outbound freight transactions when billed to Indian customers considering the place of supply as 97 (i.e. Other Territory) w.e.f. 1st October 2022.
Thanking you for your co-operation.
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