Question ID :
44963
Applicability of Reverse charge on Freight Forwarding Services
I seek your valuable opinion on the applicability of IGST under the Reverse Charge Mechanism (RCM) on freight forwarding transactions by GST registered entity in India, in connection with shipments between China and Middle East destinations (Overseas territory).
1. Background of the Transaction
• The client provides freight forwarding services to overseas customers (90% of supply provided to one customer).
• The entity is registered under GST in India and has no domestic taxable or exempt turnover apart from exports.
• For its freight forwarding assignments, the client books cargo space with Chinese carriers on a principal to principal basis to execute shipments to the Middle East.
• The Bill of Lading (BL)/Air Waybill (AWB) is issued showing the Chinese exporter as shipper and the Middle East customer as consignee.
• Freight invoices are raised by the Chinese carriers/ agents on the Indian entity, as it books and pays for the transportation.
• The client in turn raises export invoices on the Middle East customer for the full freight/logistics value (including their profit) in foreign currency and receives payment through normal banking channels.
. your valuable opinion is sought for:
Whether the freight forwarding transactions with overseas Chinese carriers constitute “import of services” liable to IGST or whether they fall outside GST scope, considering:
1. The transportation is performed and consumed entirely outside India (China ? Middle East route).
2. No part of the service is received or utilized in India
Thanking you
posted by
Suresh Raman
on
Feb 7 2026 12:00AM