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The tax demand was rescinded after the shipping companies provided a joint undertaking affirming that no import of services occurred during the 2017-18 period, the sources said.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The Directorate General of Goods and Services Tax Intelligence (DGGI) has withdrawn a tax demand of approximately Rs 30 billion for the fiscal year 2017-18 against 18 foreign shipping companies operating in India, according to sources familiar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 The tax demand was rescinded after the shipping companies provided a joint undertaking affirming that no import of services occurred during the 2017-18 period, the sources said.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)

Infrastructure Urban

06 Apr 2026

InsideFPV Delivers ₹10 Crore Kamikaze Drone Order Under MoD’s EPR Route

InsideFPV, a Surat-based drone technology manufacturer, has successfully executed a ₹10 crore defence contract to supply indigenous kamikaze drones under the Ministry of Defence’s Emergency Procurement Route (EPR). The company completed the delivery of hundreds of FPV kamikaze drone platforms within a rapid two-month timeframe, highlighting its ability to meet urgent military procurement timelines.The supply orders were fulfilled under the emergency procurement mechanism, which is aimed at fast-tracking acquisitions for immediate operational needs. InsideFPV’s quick execution reflects it..

Infrastructure Energy

06 Apr 2026

Vedanta Resources Secures Fitch Upgrade to ‘BB-’, Best Rating Since 2015

Vedanta Resources Limited (VRL), a global player in metals, oil & gas, critical minerals, power and technology, has received a credit rating upgrade from Fitch Ratings, marking its strongest bond rating in over a decade.Fitch has raised Vedanta Resources’ Long-Term Foreign-Currency Issuer Default Rating (IDR) to ‘BB-’ from ‘B+’, while maintaining a Stable Outlook. The agency also upgraded VRL’s senior unsecured rating, along with the ratings of US dollar-denominated bonds issued by Vedanta Resources Finance II Plc and guaranteed by VRL, to ‘BB-’.The upgrade represents Vedan..

Real Estate

06 Apr 2026

NAREDCO NextGen NCR Chapter Launched

The NAREDCO NextGen NCR Chapter was recently launched at Excelerate 2026 in Mumbai, marking a key step towards integrating emerging real estate leaders from the National Capital Region with the national platform. The initiative aims to promote sustainable and responsible urban development through collaboration and knowledge exchange.The event brought together young developers, entrepreneurs, and professionals from across NCR, including Noida, Gurugram, Ghaziabad, Faridabad, Bhiwadi, and Meerut. Discussions focused on urban development, finance, sustainability, innovation, and policy, emphasisi..