First IGST Refund on Ocean Freight sanctioned [2022 Updated]

Published on: Wed Aug 03 2022
First IGST Refund on Ocean Freight sanctioned [2022 Updated]

Recently, Supreme Court pronounced the landmark judgment in the case of Mohit Minerals Case Pvt. Ltd. [Civil Appeal No. 1390 of 2022 dated May 19, 2022] wherein Hon’ble Court upheld the decision of the Gujarat High Court and held that no tax is leviable under the Integrated Goods and Services Tax Act, 2017, on the ocean freight for the services provided by a person located in non-taxable territory by way of transportation of goods by a vessel from a place outside India up to the customs station of clearance in India and consequently, the levy and collection of tax on such services is not permissible.

Relying upon the decision passed in the case of Mohit Minerals, recently Gujarat High Court in the case of Louis Dreyfus Company vs Union of India R/Special Civil Application. No. 11540 of 2021, dated 07.072022, directed the respondent to grant the refund of the amount of IGST already paid by the applicants along with the statutory rate of interest on such refund within the period of six weeks.

It is pertinent to mention here that, as far as the refund on ocean freight is concerned, a few days back similar issue came up for consideration before the co-ordinate bench in ADI Enterprise vs UOI, Misc. Civil Application No. 1 of 2020 in Special Civil Application No. 10479 of 2019, wherein the question was about a refund of IGST paid pursuant to Notification No 10 of 2017 – Integrated Tax (Rate) dated 28.06.2017 and Notification No 08 of 2017 – Integrated Tax (Rate) read with corrigendum dated 30.06.2017, wherein the court directed the respondent to refund the amount of IGST already paid by the applicants pursuant to Entry No 10 of Notification No 10/2017 –IGST.

These judgments will set the precedent for those taxpayers who have paid the IGST on ocean freight and now relying upon the decision passed by the Hon’ble court, taxpayers who have paid GST on ‘Ocean Freight’ on imported goods will be entitled to claim refunds following the Mohit Minerals, Louis Dreyfus Company, ADI Enterprise provided they have not claimed the input tax credit.

If you also have paid IGST on ocean freight earlier, you are eligible to claim the refund of the same now!

Please feel free to connect with us in case you are facing any issues in getting your GST refunds!

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