GST on Ocean Freight: SC dismisses Appeal of Union in matter of Mohit Minerals

The Supreme Court (SC) today has pronounced judgment in the matter of Union of India vs Mohit Minerals, related to Ocean Freight matter.

Allowed refund of IGST paid on ocean freight beyond limitation period prescribed under GST Law

The Gujarat High Court in the matter of Mohit Minerals (Pvt.) Ltd. v. Union of India and others [Special Civil Application No. 726 of 2018 dated January 23, 2020] held that the Notification No. 8/2017 – Integrated Tax (Rate) dated June 28, 2017, and Entry No. 10 of the Notification No. 10/2017 – Integrated Tax (Rate) dated June 28, 2017, lack legislative competency and the same were declared as unconstitutional.

IGST payment on Ocean Freight stayed by Orrisa HC subject to SC decision

An appeal was filed by the Union of India against the judgment of the Gujarat High Court, and the same has been now dismissed by the Apex Court.

While upholding the judgment of the Gujarat High Court, the Court held that recommendations of the Goods & Service Tax (GST) Council are only recommendatory & not binding on Union and State. It is because the parliament intended the council to have a persuasive value. Neither 279A begins
with a non-obstante clause, nor does it envisages a repugnancy provision. State and Centre can equally legislate on matters of GST.

In nutshell, GST is not leviable on ocean freight.