QUESTION

 We are getting the International transportation services from DHL, FedEx and other vendors, they are charging IGST in case of goods exported as per IGST Section 12, (IGST Amendment Act 2018 No. 32 of 2018` `Provided that where the transportation of goods is to be a place outside India, the place of supply shall be the place of destination of such goods` In GSTR9A such type of input are not coming, so please advise: 1.) Whether we are eligible to claim such Input Tax if Place of Supply is different to the recipient of place? 2.) Is this services covered under Exempt category since such service is transport by Air or Sea? 3.) Other available option to streamline the process to claim the credit with abiding the law. Ravi Kumar Verma Okaya Power Pvt. Ltd

ANSWER

Facts of the case:
International transportation services are being availed from DHL, FedEx etc. The vendors are charging IGST for goods exported.

Law Applicable:
1. As per Notification no. 08/2017 - IGST (Rate), the following rates of supply shall be applicable:
Heading 9968- Postal & Courier services - 18%
Heading 9965- Goods transport services - 18% (Exemption provided vide N/N 09/2017-IGST (Rate) upto 30th September 2020)

2. As per Notification no. 09/2017 - IGST (Rate), the following services are exempt from levy of IGST:

Sl. No. 20A - Services by way of transportation of goods by an aircraft from customs station of clearance in India to a place outside India (Nothing contained in this serial number shall apply after the 30th day of September 2020)

Sl. No. 20B - Services by way of transportation of goods by a vessel from customs station of clearance in India to a place outside India. (Nothing contained in this serial number shall apply after the 30th day of September 2020)

Interpretation:
The services received by you from DHL, FedEx etc fall in the category of courier services and not under transportation of goods service. Courier services fall under HSN Code 9968. The exemption notification provides exemption for HSN Code 9965 i.e., services by way of transportation of goods by an aircraft/vessel from a custom station in India to a place outside India. There is no exemption provided for courier services.
The services received by DHL/FedEx from Air India/Cargo Company for transportation of goods from India to a place outside India will fall under the category of Transportation of Goods by air/vessel and will be exempt under Sl. No. 20A/20B of N/N 09/2017.

Regarding claim of ITC in case the POS is different from the place of recipient, there is no restriction as per law for claiming such ITC.

Conclusion:
Services provided by DHL, FedEx etc. are taxable supply and does not fall under the category of exempt. Also, there is no restriction as per law for claiming such ITC. For streamlining the process it is advisable to keep the copy of invoice and claim ITC in GSTR-3B. Also, it should be made sure that the conditions of Section 16(2) are satisfied.