DGGI drops Rs 3,000 crore tax demand for FY18 on 18 foreign shipping firms working in India: Report

The development comes after the foreign shipping companies gave a joint undertaking that there was no import of services in 2017-18, the report added.

The Directorate General of Goods and Services Tax Intelligence (DGGI) has dropped a tax demand of Rs 3,000 crore for the financial year 2017-18 against 18 foreign shipping companies operating in the country, The Economic Times has reported. However, the report added that the tax demand for subsequent years will remain as it is.

This comes as good news for foreign shipping lines like Maersk, Orient Overseas Container Line Ltd and Hapag Lloyd Mediterranean Shipping, as they were facing notices for non-payment of goods and services tax (GST) on import of services from July 2017 onwards.

The development comes after the foreign shipping companies gave a joint undertaking that there was no import of services in 2017-18, the report added.

Moneycontrol couldn't independently verify the report.

Earlier on August 22 CNBC-TV18 reported that the Centre is likely to give GST relief to Infosys, foreign shipping lines and foreign airlines and that the government is mulling introducing changes to the June circular in the forthcoming GST council, which is scheduled for September 9.

Moneycontrol had earlier reported in April about the government's plans where foreign airlines and shipping lines are likely to be exempted from paying GST at the time of import of services, but they can pay at the time of disbursal of services.

The DGGI, in February this year, sent out summons to all the foreign shipping lines operating in India regarding allegations that the branch offices had not paid GST under the reverse charge mechanism for services such as rental, maintenance of aircraft and salary paid of crew abroad, the report added.