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Market Cap £273.4m
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India to levy service tax on freight for imports on delivered basis

Thu 19th January, 2017 4:01pm
By Nidhi Verma 
    NEW DELHI, Jan 19 (Reuters) - Overseas exporters chartering 
foreign vessels to supply goods to India will have to pay a 
service tax on freight from Sunday, a government notification 
said. 
    It will be the same as the 4.5 percent service tax that 
India currently levies on free-on-board (FOB) cargoes, where the 
ship is chartered by a local buyer.  
    Prior to the change, imports in foreign ships hired by the 
overseas seller - known as on a cost and freight (CFR) basis - 
have been exempt from this charge. 
    The difference in tax rates has affected the business of 
Indian shipping lines such as Shipping Corp of India  SCI.NS , 
Great Eastern Shipping Co Ltd  GESC.NS  and Mercator Ltd 
 MRCT.NS . 
    "This will provide a level playing field to Indian shipping 
companies ... there will be no major impact on importers as most 
of the service tax is refunded as credit under a (government) 
scheme," said L.K. Gupta, chief executive at Essar Oil. 
    India, the world's third biggest oil importer, ships in 
about 80 percent of its oil needs. The South Asian nation also 
imports fertilisers, precious metal, coal and steel among other 
goods. 
 
 (Reporting by Nidhi Verma; Editing by Mark Potter) 
 ((nidhi.verma@thomsonreuters.com; +91 11 49548031; Reuters 
Messaging: nidhi.verma.thomsonreuters.com@reuters.net)) 
 
Keywords: INDIA TAX/IMPORTS
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