GST Council to debate tax parity for foreign and Indian shipping lines

A new amendment is being discussed by the GST (Goods and Services Tax) Council on February 18 with respect to the IGST (Integrated Goods and Services Tax) Act to modify the place of supply of transportation of goods from ‘destination of goods’ to ‘location of the recipient’.

This new change is to bring uniformity in taxation on Indian and foreign shipping lines to Indian exporters and will ensure that both the Indian shipping lines and foreign shipping lines have similar liability to pay or not pay IGST on the movement of goods by containers from India to outside India and vice-versa.

At present, the export freight is taxable to Indian exporters and are charged by the Indian shipping lines, however, the foreign shipping lines’ export freight is not taxable to Indian exporters for the movement of goods to any place outside India or interstate nor an intra-state supply. That’s why Indian exporters opt for foreign shipping lines over Indian shipping lines.