GST for Shipping services in India

The Government of India has introduced the Goods & Service Tax (GST), a comprehensive indirect tax reform that applies to all billing done from 1st July, 2017. GST has replaced all forms of indirect taxes that were previously levied by the Central and State Government. It is a significant step in implementing a uniform indirect taxation system in India. The most important aspect of GST is that it allows for input tax credit which allows sellers to claim tax that has already been paid. This eliminates consumers paying tax on tax.

GST is divided into 2 structures depending on the place of supply of goods and services. If the transaction is completed within a state, then the tax to be levied is Central GST (CGST) and State GST (SGST) each at 50% of the total tax rate. If the transaction is completed in another state, Integrated GST (IGST) is applicable at 100% of the tax rate.

GST is a destination based consumption tax and consists of four rates namely 5%, 12%, 18% and 28%. The applicable rate of tax for vessel agency services and P&I correspondent services is 18%. The rate of tax for the transport of goods is 5%. Invoices for the month must be uploaded to the Government Treasury by the 10th of the next month and GST on these invoices must be paid by the 20th of that month, regardless of receipt of funds. Cancellation can only be effected by a credit note to be similarly uploaded on to the website and would entail more administrative time.