The government has made a decision to make the scrapping of the IGST on ocean freight and the same proposal is under consideration for the GST council in the next meeting. The particular decision is made to consider the supreme court order on the scrapping of IGST on ocean freights. This has made a sigh of relief to the importers who were earlier in the doubt about the tax refunds.
The Mohit mineral has made a petition and on the same case judgement, the supreme court made the decision to scrape the ocean freight IGST. The order would be taken to the GST council. Both the GST council and law ministry have appreciated the order of the supreme court and they would surely consider the judgment to scrap the IGST on ocean freights. This would also encompass the agenda of the GST council in the next meeting.
The particular proposal has been to be presented to the 48th GST council meeting next month and the senior official would take the final decision on the applicability of IGST on ocean freights. The draft circular will be given to the GST council and after the clarity, a circular will be issued that would clearly state the exemption of IGST on ocean freights. Currently, the GST council’s next meeting is scheduled to be held in Madurai next month.
The decision would be very much positive for the importers and give clarity on the tax refunds that are worth INR 1000 crore or more.
The supreme court has made it clear that all importers must get their tax refunds on time by this decision. Till now there was not much clarity on the same issue and a circular will give a transparent mention of such exemption to the authorities and importers. A bench of justices DY Chandrachud, Surya Kant, and Vikram Nath recently dismissed the appeal by the union government raised by Gujarat high court judgment that the ocean freight IGST is unconstitutional.
The supreme court also mentioned that the governments including the state as well as the union governments along with the GST council can take such decisions on their own by analysing the impact on the assessments. Also after the judgment, the centre will take a legal decision on the judgment.
The earliest Gujarat high court also directed to return the ocean freight IGST to the Central Board of Indirect Taxes and Customs within 6 weeks along with the interest still there was no action taken.
