A provision in the Central GST
Act allows levying of both the basic customs duty and IGST
on the cost, insurance and freight (CIF) value of goods brought into India, and an additional IGST
on ocean freight between two foreign parties for movement of these goods.
For instance, assume goods come from Washington to London, before being shipped further to Mumbai port. There is an element of ocean freight between the parties in Washington and Lon-don. This could include steamship costs, broker commissions, duties and tariffs, vessel and port maintenance costs, labour costs, etc.
When the basic customs duty and IGST
are already paid on the CIF value, argue the petitioners, why should there be another tax on the ocean freight element. This would, contends Rastogi, give rise to double taxation -- the ocean freight element includes CIF. Besides, how are Indian parties concerned with a transaction between two overseas entities?