IGST on Ocean Freight Invalid: Madras HC Applies Mohit Minerals Ratio, Quashes Entries 9 & 10 of 2017 IGST Notifications [Read Order]
The impugned entries in the notifications, by taxing the freight component separately, were held to contradict the scheme of the GST legislation and exceed the powers conferred under the IGST Act
![IGST on Ocean Freight Invalid: Madras HC Applies Mohit Minerals Ratio, Quashes Entries 9 & 10 of 2017 IGST Notifications [Read Order]](https://images.taxscan.in/h-upload/2025/10/30/2100998-igst-ocean-freight-madras-hc-mohit-minerals-ratio-igst-notifications-taxscan.webp "IGST on Ocean Freight Invalid: Madras HC Applies Mohit Minerals Ratio, Quashes Entries 9 & 10 of 2017 IGST Notifications [Read Order]")
The Madurai Bench of the Madras High Court has quashed Entry 9 of Notification No. 8/2017-Integrated Tax (Rate) and Entry 10 of Notification No. 10/2017-Integrated Tax (Rate), both dated 28 June 2017, which had imposed Integrated GST ( IGST ) on ocean freight under reverse charge. A Division Bench comprising Dr. Justice Anita Sumanth and Justice C. Kumarappan, while entertaining...
The Madurai Bench of the Madras High Court has quashed Entry 9 of Notification No. 8/2017-Integrated Tax (Rate) and Entry 10 of Notification No. 10/2017-Integrated Tax (Rate), both dated 28 June 2017, which had imposed Integrated GST ( IGST ) on ocean freight under reverse charge.
A Division Bench comprising Dr. Justice Anita Sumanth and Justice C. Kumarappan, while entertaining writ filed by Greenstar Fertilizers Ltd, relied on the Supreme Court judgment in Union of India v. Mohit Minerals Pvt. Ltd., (2022) 61 GSTL 257 (SC), which held that such levy of IGST on ocean freight in case of Cost, Insurance, and Freight (CIF) imports is unconstitutional and ultra vires the IGST Act, 2017.
The Court observed that the levy on ocean freight amounted to double taxation, since the importer had already paid IGST on the composite supply of goods, which included the cost of freight and insurance.
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The Bench observed the Mohit Minerals ruling that once the importer pays IGST on the CIF value of goods, a separate levy on the freight component would violate Section 8 of the CGST Act, which governs taxation of composite supplies.
The apex court also said that under the composite supply principle, the supply of goods and services naturally bundled together such as transportation and insurance forming part of a CIF contract must be taxed as a single supply of goods. The impugned entries in the notifications, by taxing the freight component separately, were held to contradict the scheme of the GST legislation and exceed the powers conferred under the IGST Act.
Accordingly, applying the ratio of Mohit Minerals, the Madras High Court allowed both writ petitions declaring the impugned Entries 9 and 10 as ultra vires and invalid. No costs were imposed.
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