Question14 :

XYZ is importing goods from PQR, Germany. The ocean freight for the same is initially paid by the foreign supplier(PQR) to the shipping line and the same is subsequently recovered from XYZ by adding the value of the same in the selling price and accordingly XYZ is paying import duty on the value which includes charges of ocean freight. IGST is also charged in the bill of entry for imports. Is XYZ liable to pay GST under reverse charge on ocean freight?

Answer:

The Ocean freight is already included in value of import and tax is paid on that. in this case payment by PQR is made as pure agent please see rule 33 of CGST Rules. Payment made in capacity of pure agent are not to be taxed.
My views:
As per Sr. No. 10 of Notification No. 10/2017- Integrated Tax (Rate) dt. 28.06.2017, Services supplied by a person located in non- taxable territory by way of transportation of goods by a vessel from a place outside India up to the customs station of clearance in India. The IGST paid being under the customs provisions on the ocean freight, GST under reverse charge will be required to be paid as per above notification again by XYZ since GST and Customs laws are independent to each other. Kindly clarify sir.
ANSWER
The relevant portion tried upon by you for framing your view is given in the table Please note that it says when the transportation charges are paid to the person providing services of transportation and located outside INDIA
In your case the charges are paid to the person who is arranging it you are not paying to transport company you are paying to person who is using transportation and loading the said expanse to your cost.
Let us take example of sale of goods in India when you charge transportation from the buyer and add it in the assessable value of the product in that case you are paying tax on the total value under section 15 by adding the value of transportation in the value of goods you pay to the transporter.
The same is this case with one variation that payment and billing are made in two portion one for goods second for transportation
10
Services supplied by a person located in non- taxable territory by way of transportation of goods by a vessel from a place outside India up to the customs station of clearance in India.
A person located in non-taxable territory
Importer, as defined in clause (26) of section 2 of the Customs Act, 1962(52 of 1962), located in the taxable territory.
(Reply Dt. 23/12/2017)