RCM on Ocean Freight Under FOB Imports

Question: As we understand decision of Hon’ble Gujarat HC in Mohit Minerals, though touches upon FOB import, it gives its final decision only for RCM for Ocean Freight in case of CIF import. Does it mean RCM on Ocean freight in case of FOB import remains unchallenged/undecided even after that decision?

Answer: Interestingly, in their final Para No. 254, Hon’ble Gujarat High Court held – “In view of the aforesaid discussion, we have reached to the conclusion that no tax is leviable under the Integrated Goods and Services Tax Act, 2007, on the ocean freight for the services provided by a person located in a 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 and the levy and collection of tax of such ocean freight under the impugned Notifications is not permissible in law.”.  Thus, there is no mention of CIF or FOB but the very activity of transportation of goods into India.  Thus, if we look into the judgement, I would read the above para to include both.  But to my humble opinion, while there is a clear case for CIF, but for FOB cases, the verdict of Hon’ble Supreme court should be awaited.  Till then, any liability with respect to which credit cannot be taken should be deposited under protest to avoid any interest liability.