Application of Indian service tax on prepaid freight charges for shipments destined to India
01 - Feb - 2017
 Regarding application of Indian service tax on prepaid freight charges for shipments destined to India.

 

 Dear Valued Customer,

 

Government of India Ministry of Finance (Department of Revenue) has issued Notification

No.3/2017 – Service tax on 12th January 2017.

 

The New ST notification imply that prepaid Ocean Freight(OFR) including surcharges as applicable at origin on Imports into India by way of Vessel is subject to service tax with effect from 22nd January 2017.

 

Reason for the levy of service tax on ocean freight is “Prepaid OFR including surcharges considered to be a transaction between Non Resident shipper and non-resident shipping Line”. For administrative convenience of Government, the master of the vessel/shipping agent has been made responsible to pay tax to the Indian Government.

 

As such in order to comply with the said notification issued by Government of India, we will presently collect the service tax component from customer in India.

 

Thank you for your continued support. Should you have any questions or concerns regarding this change, please contact our local YANG MING office.

 

Yours Faithfully,

Yang Ming Line