2024-08-23 18:01:33
The move cheered foreign shipping lines such as Maersk Line, Orient Overseas Container Line Ltd and Hapag-Lloyd Mediterranean Shipping Co, which had received notices since July 2017 for not paying goods and services tax (GST) on imported services.
The demand for the levy was dropped after shipping lines jointly pledged no import services in 2017-18, people familiar with the matter said.
However, they said the need for tax revenue will remain in the coming years.
In October 2023, the DGGI began investigating allegations that foreign shipping companies and foreign airlines’ branches in India were not paying GST on services such as leasing, aircraft maintenance and payment of overseas crew salaries under the reverse charge mechanism.
The agency has also sought detailed clarifications from the companies while enhancing the tax payment requirement for the period from July 1, 2017 to March 2024. In February this year, DGGI also issued summonses to all foreign shipping companies operating in India.
After receiving summons from DGGI Ahmedabad and DGGI Mumbai, the companies jointly applied to the finance ministry and offered the DGGI a demerger of import services.
“This exemption is applicable only for the financial year 2017-18 and not for subsequent years after the survey,” said an official who requested anonymity.
The Renovation Committee of the GST Council will decide on the exemption in subsequent years and whether the services imported by such companies will be taxable.
1724578990
#DGGI #waives #tax #demand #INR #crore #foreign #shipping #companies #FY2018
