On freight from coming Sunday India is going to charge a service tax on the imports to send their products and merchandise to India where the overseas exporters are using foreign ships. By a government notification, this statement was made.
To the service tax being charged by free on board (FOB) shipments, this tax will be equal which are taken for service by the Indian buyers. A 4.5 % service tax the FOB shipments are currently charged. The foreign ships that were hired by exporters overseas were not charged this service tax before this change happened and were known as cost and freight basis (CFR).
On the margins of the Indian Shipping companies, the tax rate difference was having an impact. For competing with the outside players, this change will give them a level field. for the local supply, India imports eighty percent of the oil and is the third largest buyer of overseas oil in the world. Many more goods from other countries also imported by India are precious metals, coal, steel, fertilisers etc.