20.02.17 | India – Import Service Tax on Prepaid Freight

We would like to inform our clients and partners shipping to India and who are located outside of India of a newly introduced service tax on freight related charges which are paid outside of India.

On a short notice, the India government announced an important change to the application of the India service tax effective from January 22, 2017 – Notice 01/2017. The India Service Tax is applicable for sea freight and related freight charges for import shipments destined to India – even if the freight is on prepaid terms outside of India. The service tax applicable for freight prepaid shipments should be payable along with the sea freight outside of India.The application of this India Service Tax will result in an increase of approximately 4.5% on ocean sea freight and freight related charges. Please note that all other service taxes applicable for shipments to and/or from India that are payable in India as per current practice remains unchanged.

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