New Delhi, May 19 (KNN) The Supreme Court on Thursday in a judgment providing relief to importers held that separate levy on India importers for supply of services by shipping line violates Central GST Act.

Bench led by Justice D.Y. Chandrachud held that, “The Indian importer is liable to pay IGST on composite supply comprising of the supply of goods and supply of services of transportation, insurance, etc, in a Cost Insurance Freight (CIF) contract, a separate levy on Indian importers for the supply of services by the shipping line would be in violation of the Central GST Act”.

In June 28, 2017, two notifications were issued levying the IGST on ocean freight.

Later in January, 2020, the Gujarat High Court declared the levy ultra vires to the IGST Act and said they lacked “legislative competency”.

It had concluded that the IGST on ocean freight under the provisions of the notifications was “not permissible in law”.

The importers had complained that the IGST was being levied on them twice on the very same transaction by segregating portions of it.

The central government had argued in the apex court that the government was well within its rights to prescribe the manner of collection of tax under the IGST Act.  (KNN Bureau)