Question 1

What is the GST rate on freight forwarding services in India?

Accepted Answer

Freight forwarding services (SAC code 9965) are taxed at 18% GST in India - broken into 9% CGST + 9% SGST for intra-state services, or 18% IGST for inter-state services. This 18% rate applies to the service fee charged by the freight forwarder, including documentation charges, handling fees, and related logistics services. The ocean freight component may have a different rate or exemption depending on the specific nature of the service.

Question 2

Is there GST on ocean freight in India?

Accepted Answer

Ocean freight on import was subject to GST under reverse charge mechanism (RCM) but this was struck down by the Supreme Court in May 2021 (Union of India vs Mohit Minerals). As of 2025, ocean freight on imports is no longer subject to GST under RCM. For export ocean freight, it is zero-rated (exempt) if the freight is included in the FOB/CIF price or separately billed by an Indian carrier. Freight forwarders should confirm the current position with their GST consultant as rules may be updated.

Question 3

What SAC code do freight forwarders use for GST invoices?

Accepted Answer

The primary SAC codes for freight forwarding services are: 9965 - Goods Transport Services (main freight forwarding code); 9967 - Supporting services in transport (THC, port charges, handling); 9985 - Support services (business support, management); 9968 - Postal and courier services. Most freight forwarding charges are classified under 9965 at 18% GST. THC, port charges, and terminal handling are typically classified under 9967 also at 18%. Always consult your CA for confirmation as SAC code classification can be disputed.

Question 4

Does the reverse charge mechanism apply to freight forwarding?

Accepted Answer

Reverse Charge Mechanism (RCM) means the recipient of the service pays GST instead of the service provider. For freight forwarding services, RCM applies in limited cases - primarily when the service is provided by a Goods Transport Agency (GTA) to a registered business. Most freight forwarding companies are not GTAs (they are freight forwarders / NVOCCs) and charge GST forward on their invoices normally. Consult your GST consultant to determine your specific classification.

Service Type	SAC Code	GST Rate	Notes
Freight forwarding service fee	9965	18%	Standard rate - 9% CGST + 9% SGST or 18% IGST
Ocean freight (export, Indian carrier)	9965	0% (Zero-rated)	Export service, zero-rated if within India
Documentation charges	9965	18%	Part of freight forwarding services
THC / Terminal Handling Charges	9967	18%	Supporting transport services
Port charges	9967	18%	Port handling and infrastructure
Customs clearance fee	9983	18%	Business support services
Insurance premium	9971	Varies	Financial services - typically exempt or 18%
Transportation (trucking)	9966	5% or 12%	Depends on provider type (GTA or non-GTA)

GST on Freight Charges in India - Complete 2025 Guide

GST Rate Summary for Freight Charges

CGST/SGST vs IGST: Which Applies?

CGST + SGST (Intra-state)

IGST (Inter-state)

GST on Freight - FAQ

Generate GST-compliant freight invoices automatically.