News
India has implemented a 4.5% service tax on import shipments of prepaid freight under the Notification No. 1/2017-Service Tax issued recently by the Ministry of Finance.
The new tax is composed of the 4.2% service tax along with the Swachh Bharat (Clean India) Cess and Krishi Kalyan (Farm Welfare) Cess at 0.15% each.
Prepaid freight and collect freight charges for India's export shipments will remain untaxable as of now.
The service tax is chargeable to shipments booked on the basis of C&F (cost and freight) or CIF (cost, insurance and freight) at the origin. Ocean freight forwarders would be seriously affected by the measure as they might have to pay the service tax and then recover the charges from their customers as in the air freight forwarding industry.
