Union of India v. Mohit Minerals Pvt. Ltd.

Introduction

The dispute arose from the levy of Integrated Goods and Services Tax (IGST) on ocean freight relating to goods imported into India under Cost, Insurance and Freight (CIF) contracts.

Under a CIF contract, the foreign exporter is responsible for arranging transportation and insurance of the goods until they reach the destination port in India. The importer pays a consolidated CIF price, which already includes the value of goods, freight, and insurance. At the time of import, IGST is levied on the entire CIF value under the Customs Tariff Act, thereby taxing all components of the transaction, including ocean freight.