India - Service Tax Guidelines for Import Ocean Freight and Allied Charges - Prepaid at Origin.

Please be informed that in view of The Government of India – Ministry of Finance’s Notification No. 1/2017-Service Tax dated 12 January 2017 (view here: 1, 2, 3), prepaid Ocean Freight and allied charges (FREIGHT charges) which were earlier exempted from the Service Tax (STax), will now be taxable.

This change is effective from 22 January 2017.

The Tax on the Inbound Prepaid Freight Charges will be calculated at 30% of the FREIGHT charges. In view of the abatement, the effective Tax rates (22 January 2017 on wards) for APL charge codes are displayed below for your easy reference.

ST2: 4.2% (14% STax is applied on 30% of taxable charges, hence the effective rate is displayed)

SB2: 0.15% (0.5% SBC rate is applied on 30% of taxable charges, hence the effective rate is displayed)

KK2: 0.15% (0.5% KKC rate is applied on 30% of taxable charges, hence effective rate is displayed)

Total: 4.5% The India Outbound Prepaid and Collect FREIGHT Charges will continue to be exempted, as of now. Kindly be informed accordingly, as APL India will be applying these from the above mentioned effective date.

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