The Merchandise exporters will have to cough up 18% Goods and Service Tax (GST) which are levied on services of transportation and goods. The same will be moving in a cash flow at a time when the exports are declining.
There is a recommendation from the GST council regarding the place of supply of transportation of goods must be determined on the basis of receivers instead of the destination of goods. The government aims to provide tax parity between the foreign and the Indian shipping lines with regard to GST on transportation of goods by vessels from India to international level and vice versa.
The export freight changes by Indian shipping lines to Indian exporters for transporting the goods to being placed outside India and it is neither inter-state nor intra-state supply. The GST which was paid will be available on credit to most of the exporters so that they may claim refund. The exports were contracted in January. While some experts say that the same will be increasing tax burden on certain exporter such as dealing with alchohol.
According to Abhishek. A. Rastogi, Founder of Law firm Rastogi Chambers, “While desired principle will provide consistency between services of transportation of goods and courier services, the proposal will lead to applicability of tax for export of goods”
