MSC Mediterranean Shipping Company would like to advise our customers that the Government of India has confirmed that all Prepaid and Elsewhere import ocean freight and ancillary ocean freight imported to India will now be liable to a service tax in the form of a percentage applicable to the ocean freight as set below.
Prior to 22/01/2017 when both Service Provider and Service Receiver, who were located outside Taxable territory of India, were getting exempted from Service Tax vide Entry Number 34 of Notification 25/2012 (Mega Exemption Notification).
Now with the release of Notification No. 01/ 2017 dated 12.01.2017, an amendment has been made stating that the exemption under Entry Number 34 would not be applicable to: “Services by way of Transportation of goods by a vessel from a place outside India up to the customs station of clearance in India’ (i.e. inbound cargo transportation or Import cargo).
MSC will invoice Service Tax on Prepaid Import Ocean Freight to shipper at Origin. For Ocean Freight manifested as Elsewhere, the Elsewhere location shall invoice said Service Tax to party paying freight.
If the shipper advises that Service Tax on prepaid/elsewhere freight will be payable by consignee in India, then MSC Bill of Lading (BL) will have clause “Service Tax on Ocean Freight and ancillary ocean charges payable at Destination”.
Please note that these changes will be effective on all import shipments under bill of lading (B/L) dated on or after 22/01/2017. For any further information on the Service Tax applicable percentage on your freight, please contact your local agent on 01473 277777.
We would like to take this opportunity to thank you for your understanding and continued support.
Your MSC Team