These foreign shipping companies got relief in India, tax demand of Rs 3000 crore ended

Many foreign shipping companies operating in India have got a big relief. The tax department has decided to withdraw the tax demand issued against them. Due to this decision of the tax department, the foreign shipping companies have got relief of about Rs 3 thousand crores.

Dropped notice against 18 companies

According to a report by ET, the Directorate General of Goods and Services Tax Intelligence (DGGI) has decided to cancel tax demands of about Rs 3000 crore against 18 foreign shipping companies operating in the country. These tax demands were for the financial year 2017-18. The news of withdrawal of demand in ET’s report has been given quoting sources related to the case.

These foreign companies will benefit

If this news is true, then this decision is going to benefit many big foreign companies. These include companies like Maersk, Orient Overseas Container Line Limited, Hapag Lloyd Mediterranean Shipping. Shipping companies had received notices from the tax department regarding non-payment of GST on import of services since July 2017.

Notices after 2017-18 still remain

According to the report, the shipping companies which were sent notices by the tax department gave a joint undertaking stating that they did not import any services during 2017-18. After that, the tax department decided to drop the tax demand of about Rs 3000 crore. However, the notices have not been dropped for the years after 2017-18.

The investigation into this matter began last year

DGGI had started investigation against shipping companies in October 2023. At that time it was alleged that many foreign shipping companies and branch offices of foreign aviation companies had not paid GST under the reverse charge mechanism. A case was made against them for not paying GST on services like rental services, maintenance of aircraft and salaries of crew members.

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