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India Subjects Foreign Shippers To Service Tax

by Mary Swire, Tax-News.com, Hong Kong

23 January 2017


From January 22, the same service tax and levies already imposed on Indian shipping companies are also payable by foreign exporters using non-Indian vessels to import goods into India.

On a free-on-board basis, Indian shipping companies have been subject to a service tax of 4.2 percent, plus the 0.15 percent Swachh Bharat (Clean India) and 0.15 percent Krishi Kalyan (Farm Welfare) levies, since June 1 last year. However, the service tax and levies were not imposed if non-Indian vessels were employed.

Imports of goods into India on foreign vessels on a cost-and-freight basis will now pay the same taxes as imports using local ships. While Indian shipping companies will now be more competitive, it is expected that the overall cost of imported goods in India will increase.

TAGS: tax | India | Welfare

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