Rules and Regulations

India GST Notice

5th July 2017

India: Goods and Services Tax Implementation – Major Tax Reform

Dear Valued Customer,

Please be informed that the Government of India has announced the implementation of GST effective from 1 July 2017.

The GST will replace the current indirect tax regime in India and unify various taxes currently levied, into a single tax structure. New regulations and compliance requirements will be put in place accordingly.

Please take note of the key points below with regards to the GST implementation in India:

The GST will be effective from 1 July 2017, applicable to invoicing date and not date of shipment.

The GST rates applicable for transportation services are:

• 5% on freight and freight-related charges

• 18% on ancillary charges (Terminal Handling Charges, Inland Haulage Charges, Documentation Fee, Demurrage & Detention, etc)

For exports prepaid out of India

On freight and related charges, GST will be invoiced by the shipping line to the customer – this is a major change compared to the previous tax structure, as service tax on freight and related charges were rated zero. The other charges will be taxed at 18%.

For exports collection out of India

It would be out of GST purview, being a service provided and received by customers located in non-taxable territory.

For imports prepaid into India

On freight and related charges, the customer will directly settle GST to the government, and claim input credit after payment.

For import collection into India

GST will be charged by the shipping line on the customer in India at the respective rates, based on the nature of charges.

We appreciate your understanding and thank you for your valuable business. For assistance, please contact your local Sales or Customer Service representative.

_____________________ Graham W Porter

CFO AU & NZ Agencies

DD: +61 3 8842 5119