DGGI drops Rs 30 billion tax demand on 18 shipping firms for FY18

26 Aug 2024 CW Team

This decision offers relief to major international shipping lines, including Maersk, Orient Overseas Container Line Ltd, and Hapag Lloyd Mediterranean Shipping, which had received notices for the non-payment of goods and services tax (GST) on the import of services starting from July 2017.

The tax demand was rescinded after the shipping companies provided a joint undertaking affirming that no import of services occurred during the 2017-18 period, the sources said.

However, the tax demand for subsequent years remains in place, they added.

The DGGI initiated an investigation in October 2023 into allegations that the branch offices of foreign shipping companies and airlines in India had failed to pay GST under the reverse charge mechanism for services such as rentals, aircraft maintenance, and salaries paid to crew members abroad.

The agency requested detailed clarifications from these companies and raised tax demands for the period from July 1, 2017, to March 2024. In February 2024, the DGGI also issued summonses to all foreign shipping lines operating in India.

Following the summonses from the DGGI Ahmedabad and DGGI Mumbai offices, these companies collectively approached the Finance Ministry, providing a detailed breakdown of their import of services to the DGGI.

"This exemption applies solely to the financial year 2017-18 and does not extend to subsequent years, for which investigations are ongoing," said one official, who requested anonymity.

The GST Council's fitment committee will decide on the potential exemption for future years and whether the import of services by these companies should be subject to taxation.

"In the last meeting, a general circular was issued that exempted certain services, but shipping and airlines were not included," the official noted. (ET)

The Directorate General of Goods and Services Tax Intelligence (DGGI) has withdrawn a tax demand of approximately Rs 30 billion for the fiscal year 2017-18 against 18 foreign shipping companies operating in India, according to sources familiar with the matter. This decision offers relief to major international shipping lines, including Maersk, Orient Overseas Container Line Ltd, and Hapag Lloyd Mediterranean Shipping, which had received notices for the non-payment of goods and services tax (GST) on the import of services starting from July 2017. The tax demand was rescinded after the shipping companies provided a joint undertaking affirming that no import of services occurred during the 2017-18 period, the sources said. However, the tax demand for subsequent years remains in place, they added. The DGGI initiated an investigation in October 2023 into allegations that the branch offices of foreign shipping companies and airlines in India had failed to pay GST under the reverse charge mechanism for services such as rentals, aircraft maintenance, and salaries paid to crew members abroad. The agency requested detailed clarifications from these companies and raised tax demands for the period from July 1, 2017, to March 2024. In February 2024, the DGGI also issued summonses to all foreign shipping lines operating in India. Following the summonses from the DGGI Ahmedabad and DGGI Mumbai offices, these companies collectively approached the Finance Ministry, providing a detailed breakdown of their import of services to the DGGI. This exemption applies solely to the financial year 2017-18 and does not extend to subsequent years, for which investigations are ongoing, said one official, who requested anonymity. The GST Council's fitment committee will decide on the potential exemption for future years and whether the import of services by these companies should be subject to taxation. In the last meeting, a general circular was issued that exempted certain services, but shipping and airlines were not included, the official noted. (ET)

Real Estate

08 May 2026

Integrated Waterproofing Strategies

Waterproofing buildings used to be an annual pre-monsoon affair but the evolution of real-estate development has changed that approach. In new developments, developers are weaving waterproofing solutions into both the design and construction phases, an approach that Nikhil Madan, Managing Director, Mahima Group, says, “is all about ensuring lasting durability [of the building] and keeping lifecycle risks including water seepage and extensive maintenance to a minimum.”Watertight by designAluminium formwork systems aren’t commonly thought of as a waterproofing tool but at the Mahima Group,..

Infrastructure Urban

08 May 2026

GROHE Showcases Water-Led Design At Milan

GROHE unveiled its GROHE SPA Aqua Sanctuary at Milan Design Week 2026, transforming Piccolo Teatro Studio Melato into an immersive showcase of water, design and wellbeing. Built on the philosophy of ‘Wellbeing Through Water’, the installation reimagined bathrooms as holistic spaces for relaxation, rejuvenation and self-care.The Aqua Sanctuary was presented through three interconnected sanctums. The first showcased the 3D-printed GROHE SPA AquaTree shower and faucet, highlighting bespoke innovation and biophilic design. The second featured the Atrio Private Collection and GROHE SPA x Buster..

Infrastructure Transport

08 May 2026

Rahee Group Expands Rail Manufacturing Capacity

Rahee Group has outlined a multi-year investment roadmap to expand its operational footprint and strengthen manufacturing capabilities for India’s growing railway and urban transit sector. The Group is expanding in Odisha with a new Track Component Casting Unit, for which the groundbreaking ceremony was held on 8 April 2026 in the presence of Odisha Chief Minister Mohan Charan Majhi.The Group’s flagship EPC arm, Rahee Infratech Ltd, continues to focus on complex rail infrastructure projects, including track systems, bridges, viaducts and ballastless infrastructure. Its wholly owned subsidi..