Court Orders IGST Refund on Ocean Freight Within 6 Weeks: GUJRAT HIGH COURT

The Gujarat High Court has ordered the CBIC to reimburse the GST paid on ocean freight within six weeks, plus interest at the statutory rate.

The Supreme Court’s judgement in Mohit Minerals Pvt. Ltd. vs. Union of India was used by the division bench of Justice N.V. Anjaria and Justice Bhargav D. Karia (R/SCA No. 11540 of 2021)to invalidate GST on maritime freight.


The Gujarat High Court found that the announcements making the tax subject to the reverse charge procedure are unconstitutional in response to a writ complaint brought by Mohit Minerals Private Limited. The Supreme Court ruled that the importer is not required to pay tax using the reverse charge technique.

Petitioner is a private limited company that operates in the food processing industry, dealing mostly in edible oils, coffee, etc. The petitioner requested that the department/respondents be instructed to reimburse the IGST that had been paid based on the total cost of the ocean freight. Moreover, the petitioner requested that the respondent authorities be instructed not to collect IGST in accordance with Notification No. 10 of 2017-Integrated Tax (Rate) dated 28.6.2017 and Notification No. 8 of 2017-Integrated Tax (Rate) of the same date read with a corrigendum dated 30.6.2017.

With the start of GST collection, Notification No. 8 of 2017 stated that IGST at the rate of 5% would be collected on inter-state supply of services including the transportation of commodities by vessel, etc. The entire IGST must be paid on a reverse charge basis by the importer, according to Notification No. 10 of 2017 dated 28.6.2017, which was issued in respect of services supplied by a person located in the non-taxable territory by way of transportation of goods by vessel from a place outside India upto the Custom Clearance Station in India. On June 30, 2017, an erratum was released to correct certain errors. The original rate of collection for the IGST was 10% of the CIF price (cost, insurance, and freight).


The Gujarat High Court has directed the Central Board of Indirect Taxes and Customs (CBIC) to refund the Integrated Goods and Service Tax (IGST) on ocean freight within six weeks along with the statutory rate of interest.

The division bench of Justice N.V. Anjaria and Justice Bhargav D. Karia has relied on the decision of the Supreme Court in the case of Mohit Minerals Pvt. Ltd. vs. Union of India in which GST on ocean freight was struck down.

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Judgement reviewed by Deepa Bajaj

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