2026-VIL-465-BOM
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SGST High Court Cases

GST - Place of supply of transportation service where supplier of goods is located outside India, Import on CIF basis - Petitioner engaged in the business of providing vessel services on hire and freight basis, was issued notice holding that the place of supply of the transportation service was in India and liable to IGST on such supply of service - Whether the place of supply of the transportation service provided by the petitioner should be considered as India, making the petitioner liable to pay IGST, or whether the place of supply should be considered as the destination of the goods, making the supply of service a part of the composite supply of goods and not liable to separate IGST – HELD - The petitioner provides vessel services on a Hire and Freight basis and the buyer of the goods pays custom duty on freight and hence the goods are imported on CIF basis. Once the aforesaid goods are imported on a CIF basis and the customs duty in respect thereof has been discharged by the buyer of the goods, then the same amount cannot be liable for IGST under forward mechanism in the hands of the petitioner. The liability to pay the tax cannot be foisted on the petitioner, the supply of services of transportation of goods on behalf of the importer becomes a composite supply, which does not attract an additional tax in the hands of the petitioner – Further, the facts of the present case are squarely covered by the decision of the Supreme Court in the case of Union of India vs. Mohit Minerals Pvt. Ltd. In that case, the Supreme Court had held that in a CIF contract, the supply of goods is accompanied by the supply of services of transportation and insurance, which forms a part of the bundle of supplies between the foreign exporter and the Indian importer, on which IGST is payable. To levy the IGST invoking Section 13(9) of the IGST Act, 2017 on the supply of the service component of the transaction would be in violation of the principle of composite supply enshrined in the GST legislation - The supply of transportation services by the petitioner becomes a part of the composite supply of goods, and cannot be subject to separate IGST levy on the petitioner. The show-cause notice and the order passed by the tax authorities are quashed, and directed the refund of the disallowed amount to the petitioner. The consequential refund which was sought to be disallowed to the petitioner shall be paid along with interest – The writ petition is allowed
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