Ocean Freight not subject to Service Tax under RCM in case of CIF Imports: Supreme Court [Read Judgement]
![Ocean Freight not subject to Service Tax under RCM in case of CIF Imports: Supreme Court [Read Judgement]](https://www.taxscan.in/wp-content/uploads/2023/09/Ocean-Freight-Service-Tax-RCM-CIF-Imports-Supreme-Court-Service-Tax-under-RCM-taxscan.jpg "Ocean Freight not subject to Service Tax under RCM in case of CIF Imports: Supreme Court [Read Judgement]")
In a recent ruling, the Supreme Court bench comprising Justice B.V. Nagarathna and Justice Ujjal Bhuyan, has dismissed the revenue's appeal and declared that there is no service tax under Reverse Charge Mechanism (RCM) applicable to Ocean Freight for Cost, Insurance, and Freight (CIF) imports. The Civil appeal before the Supreme Court stems from the appellate order handed down by...
In a recent ruling, the Supreme Court bench comprising Justice B.V. Nagarathna and Justice Ujjal Bhuyan, has dismissed the revenue's appeal and declared that there is no service tax under Reverse Charge Mechanism (RCM) applicable to Ocean Freight for Cost, Insurance, and Freight (CIF) imports.
The Civil appeal before the Supreme Court stems from the appellate order handed down by the Ahmedabad branch of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) on March 23, 2023, which is the impugned order. CESTAT overturned the service tax demand imposed by the authorities on ocean freight.
The issue came up before the CESTAT was whether the appellant is liable to pay service tax on the service on Ocean Freight or otherwise. The CESTAT bench observed the similar case M/s SAL Steel Limited of Gujarat High Court while pronouncing the order as mentioned by the counsel of the Revenue.
In the contested judgment, CESTAT had confirmed the decision of the initial appellate authority, stating that there was no requirement to pay service tax on ocean freight under reverse charge for CIF imports.
A single-member bench composed of Mr Ramesh Nair observed that the issue of whether Ocean Freight/ Sea Transportation service is liable to service tax or otherwise has been decided in the case of SAL Steel Limited. Since there is no stay against the said High Court judgment, there is no infirmity in the impugned order which was passed relying on the jurisdictional High Court judgment in the case of SAL Steel Limited. Thus, dismissed the appeal of the revenue.
The Supreme Court noted that there were no flaws in the challenged decision of CESTAT and consequently concluded that service tax does not apply to ocean freight for CIF imports under the Reverse Charge Mechanism (RCM).
To Read the full text of the Order CLICK HERE
Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
