Mediterranean Shipping Company S.A. (MSC) wishes to advise clients that the Indian Government has recently announced that a new service tax will be applicable for all shipments to India. This tax is based on Ocean Freight and ancillary charges of Ocean Freight which are manifested with a payment method of either ‘Prepaid’, ‘Collect’ or ‘Elsewhere’.
The service tax will be 4.5% of the Ocean Freight and ancillary charges of Ocean Freight and will be implemented with a sailing date of January 22nd 2017.
Who will pay this tax?
- In the case of Prepaid payment terms, the port of load office shall collect from the party paying the Ocean Freight.
- In the case of Collect payment terms, MSC India shall collect from the party paying the Ocean Freight.
- In the case of Elsewhere payment terms, the MSC elsewhere office shall collect from the party paying the Ocean Freight.
*Special condition to the above:
If the shipper at the port of load pays the Ocean Freight at origin but does not wish to pay the service tax, MSC will add a clause to the Bill of Lading stating "Service Tax of 4.5% on Ocean Freight and ancillary ocean charges payable at Destination".
Please note that in addition to the above, the existing 15% IHC to other destination charges that are manifested with payment terms ‘Prepaid’ or ‘Elsewhere’ remains unchanged.
**This notice replaces the notice previously issued on 24/01/2017.
For further information, please contact your local MSC office.