Question 1

What GST rate applies to freight forwarding services in India?

Accepted Answer

Freight forwarding services (customs clearance, documentation, handling) fall under SAC 9965 and 9983 at 18% GST. For GTA (Goods Transport Agency) services for road transport, the rate is 5% under reverse charge or 12% with input tax credit (at the GTA's option). International ocean freight services are exempt from GST on the transportation component but the freight forwarder's service charges (agent fees) attract 18% GST.

Question 2

When do freight forwarders charge CGST+SGST vs IGST?

Accepted Answer

CGST + SGST applies when the supplier (freight forwarder) and customer are in the same state. IGST applies for inter-state transactions - when the customer's GSTIN is in a different state from the freight forwarder's GSTIN. FreightSetu automatically determines the correct tax type based on the customer's GSTIN state code vs your company's registered state.

Question 3

Are freight forwarding services for exports zero-rated?

Accepted Answer

Services directly related to the export of goods can qualify as zero-rated under IGST Section 16. This means the freight forwarder can charge 0% IGST and claim a refund of input tax credit. However, the conditions for zero-rating must be met: the service must be used for goods that are actually exported. In practice, most Indian freight forwarders raise invoices with 18% GST and leave it to the exporter to claim refund through LUT/bond.

Question 4

What SAC code should a freight forwarder use for their invoices?

Accepted Answer

Common SAC codes for freight forwarding services: SAC 9965 - Freight transport services (ocean, air, road). SAC 9967 - Supporting services in transport (port handling, CFS, container stuffing). SAC 9983 - Business support services (customs clearance, documentation, coordination). Most Indian freight forwarding companies primarily use SAC 9965 for their main freight charges and SAC 9983 for handling/documentation fees.

Service Type	SAC Code	GST Rate	Charged By
Freight forwarding / agency fee	9965	18%	Freight Forwarder
Customs clearance charges	9983	18%	CHA
Port handling / CFS charges	9967	18%	Port / CFS
Road transport (GTA) - forward charge	9965	12%	Transporter (with ITC)
Road transport (GTA) - reverse charge	9965	5%	Recipient pays GST
Ocean freight on imports (CIF)	9965	5%	Shipping Line / Importer
Ocean freight on exports	9965	Exempt / 0%	Not charged (zero-rated)
Air freight charges	9965	18%	Airline / Freight Forwarder

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IGST (Inter-state)

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