Support Services to Overseas Shipping lines/ Charterers attracts 18% GST: AAR [Read Order]

The Tamil Nadu Authority for Advance Ruling (AAR), presided by T G Venkatesh, Additional Commissioner, and K Lata, Joint Commissioner, has held that support services to overseas shipping lines/ charterers attract 18% GST.

The applicant, Translog Direct Private Limited, is engaged in providing support services to overseas shipping lines/ charterers in relation to operations of vessels of different shipping lines which are entering or exiting India. The Company offers its overseas customers a consolidated end-to-end solution by offering such services on its own account.

The applicant approached AAR to clarify whether the specific services would qualify as ‘support service’ under SAC 9985 as per Notification No. 11/2017.

The applicant submitted that; they offer support service to their customers located outside India on a Principal-to Principal basis (P2P).

The customers are in the business of chartering vessels for transportation of goods into India and moving goods outside India and for the provisions of aforesaid services, they propose to render services to vessels or shop owners to ensure smooth operations while the vessel or ship arrives in India.

The Authority observed that the applicant extends vessel-related services supporting the shipper to facilitate the entry or exit of the vessel in the Indian Ports. The services are more in the nature of support services for the transport of vessels and more aptly will be classifiable under SAC 9967. The proposed end-to-end service proposed by the applicant covers all the services specified in Group 99675, which also has an entry accommodating ‘other supporting services’ under 996759.

The Authority has held that the applicant’s business or proposed transaction is liable to be classified under SAC 9967 and attracts GST at the rate of 18% under Notification No. 11/2017.

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