India service tax

A significant service tax of 4.5% appears to have been levied by the Indian Ministry of Finance.  This new tax applies to pre-paid imports into India landing on/after the 22 January 2017.

It appears that this tax is causing confusion with exports from Australia with some shipping lines already attempting to collect the tax from Australian Exporters.  Up until recently an exemption was given on pre-paid ocean freight.

Clarification has been sought from the Department of Foreign Affairs and Trades (DFAT).  At this stage it is unclear whether or not the tax should be collected from Australian Shippers or from the local consignees in India.

Once the Department of Foreign Affairs and Trades applies clarity, we will confirm accordingly.

Source: FTA