Not Supplier/Recipient of ‘Export Freight’ on FOB Exports, no GST Payable on RCM Basis by Exporter: AAR

The Tamil Nadu Authority for Advance Ruling (AAR) clarified that Free on Board (FOB) exporters aren't liable for Goods and Services Tax (GST) under the Reverse Charge Mechanism (RCM) for ocean freight charges borne by overseas buyers. M/s DCW Ltd., a chemical exporter, sought clarity on their GST liability for freight charges. 

The AAR noted that exporters, in FOB-based exports, aren't involved in arranging or paying freight, typically managed by overseas buyers. Given the export nature and the lack of involvement in freight arrangements, the AAR ruled out GST liability under RCM. 

They emphasized that since exporters aren't engaged in freight transactions, GST payment on export freight doesn't apply under the FOB basis of exports.