22.02.2024: Foreign shipping lines under DGGI scanner

In what could be a revenue bumper for the GST collections, the Directorate General of GST Intelligence (DGGI) has issued summons to Indian offices of 18 foreign shipping lines.

According to sources, “DGGI has summoned Indian offices of Maersk, Orient Overseas Container Line Ltd, Hapag Lloyd Mediterranean Shipping, CMA CGM SA, One Ocean Network Express, Pacific International Line, Regional Container Lines, Samundera Shipping Line Ltd, Korea Marine Transport Co Ltd, Milaha Integrated Maritime & Logistics, Wan Hi Lines Ltd, TS Lines Co Ltd, Sinikor India Pvt Ltd, Xpress Feeders, Yang Ming India Pvt LTD, Zim Container Lines etc.”


“All of these foreign shipping lines have been alleged by DGGI for not paying legitimate taxes due, and evasion has been detected on account of import of services from head office by Indian branch offices,” sources said.

Currently a detailed clarifications have been sought by DGGI and the officers are in talks with all these foreign shipping lines, sources added.

Furthermore, the sources said, DGGI – the investigative arm under GST regime – alleges that foreign shipping lines “headquartered abroad have a branch offices in India which has been billing services including rental, maintenance of aircrafts, crew salary etc abroad. Thus, these services coming from abroad were liable to GST under reverse charge mechanism, which these shipping lines have not paid.”

The investigations have been carried out by DGGI Ahmedabad and Mumbai zones, sources said.

All these shipping lines have been under scanner since October 2023.

CNBC-TV18, quoting sources had first reported on October 20, last year, that DGGI had conducted detailed probe saying that “Under the GST law, an establishment of a company in India and outside India are treated as distinct persons and any service provided by the head office to the branch office is deemed as a supply, even when it is without any consideration.”

However, shipping liners have given detailed representation to the Finance Ministry, Central Board of Indirect Taxes and Customs (CBIC), DGGI and have been seeking a resolution.

Source: CNBC TV 18

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