New Service Tax On All Import Freight/Hire

An exemption from India's service tax for services provided, or agreed to be provided, by a party located outside India (i.e. in non-taxable territory) to a another party also located outside India, for the carriage of goods by sea from a place outside India up to a customs clearance station in India, was withdrawn following the introduction of "Notification No. 1/2017 – Service Tax" dated 12 January 2017.

Effect of Notification No. 1/2017

With effect from 22 January 2017, overseas exporters chartering foreign vessels for the purpose of supplying goods to India will now be liable for service tax on freight/hire, including in situations where both the service provider and the service recipient are located outside India.