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Gujarat High Court: Voluntary Integrated GST Paid on Ocean Freight Refundable Despite Time Bar

April 09, 2025 4 min read
author Anamika Mishra [Sub Editor]
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In a significant judgment, the Gujarat High Court recently ruled that the Integrated Goods and Services Tax (IGST) paid voluntarily on ocean freight is refundable, even if the application for refund is filed after the time limit mentioned under the GST laws. This decision brings relief to importers and exporters across India who had paid IGST on ocean freight charges under protest or by mistake.

To understand this better, let’s look at the background. When goods are imported into India via sea routes, there are shipping charges involved, known as "ocean freight." Earlier, under the interpretation of GST laws, the government required importers to pay IGST on these charges under the reverse charge mechanism. In simple words, importers were made responsible for paying tax on services provided by foreign shipping companies. Many businesses, to stay on the safer side, paid this IGST voluntarily. However, the situation changed after the Supreme Court, in the landmark Mohit Minerals Pvt. Ltd. case, ruled that IGST on ocean freight in CIF (Cost, Insurance, and Freight) contracts was not valid under GST law. This left many importers wondering whether they could claim a refund for the amounts they had already paid.

In the case recently heard by the Gujarat High Court, an importer had paid IGST on ocean freight and later applied for a refund after the Supreme Court’s judgment. The GST department, however, rejected the refund application, saying that it was filed after the two-year time limit allowed under Section 54 of the CGST Act. The importer challenged this rejection before the Gujarat High Court. The court, after hearing the arguments, ruled in favor of the importer. It stated that the IGST collected on ocean freight was not legally due and hence not considered a "tax paid" under GST law. Since the payment was made due to a mistake of law, it should be treated as a deposit or mistaken payment, and not as a regular tax. Because of this, the general law of refunds would apply, and not the time limits mentioned in GST law.

The court emphasized that the government cannot retain money that was collected without proper legal authority. It highlighted that when a taxpayer pays money believing it to be a tax when it’s later declared not to be, it becomes the government’s responsibility to return it. Denying the refund just because the application was late would amount to injustice. The court firmly stated that the time limit under Section 54 does not apply to such mistaken payments, and taxpayers have the right to get their money back. This ensures that public money is not kept by the government without a lawful basis.

This ruling is crucial because it brings clarity for many importers across the country who paid IGST on ocean freight and were later denied refunds because of the time bar. It not only allows them to claim refunds now but also strengthens the principle of fairness in tax administration. It means the government cannot profit from rules that were later struck down as illegal. Businesses affected by this issue should now review their past transactions and check whether they have paid IGST on ocean freight. If they have, they can apply for a refund even if the two-year period has passed, by citing this Gujarat High Court decision. If refund claims are still rejected, they can consider going to court with stronger legal backing.

In conclusion, the Gujarat High Court’s judgment is a big win for fairness and justice. It supports taxpayers who followed rules that were later found invalid, ensuring they are not punished for doing what they thought was legally correct. The ruling sets a positive example for how tax disputes should be handled, with compassion, logic, and fairness. It is now hoped that GST authorities and other High Courts across India will follow the same approach and ensure that businesses get the refunds they rightfully deserve.


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How African Logistics Hubs Are Gaining Momentum in Global Trade

April 08, 2025 5 min read
author Anamika Mishra [Sub Editor]
related

For a long time, Africa was seen as a consumer in the global supply chain importing goods, relying on foreign ports, and struggling with weak infrastructure. But today, that story is changing fast.

Across the continent, logistics hubs are rising. Smart ports, free trade zones, and modern infrastructure are positioning Africa not just as a participant in global trade, but as a serious player in

it.

Africa has always had the potential, a young, fast-growing population, abundant natural resources, and a strategic location between Asia, Europe, and the Americas. But for decades, supply chains in Africa faced massive challenges. Poor road conditions, outdated ports, and slow, unpredictable customs systems made it difficult for goods to move quickly and efficiently. However, that’s beginning to change in a big way. Governments, private investors, and international partners are pouring billions into logistics infrastructure, determined to transform key cities and ports into major trade gateways.

Several African logistics hubs are already making a name for themselves. In East Africa, Djibouti is now a critical port for the region, especially for landlocked Ethiopia. With support from Chinese investments, Djibouti has modernized its port and rail systems, becoming a vital connector between Africa and Asia.

South Africa continues to lead with its major ports in Durban and newer ones like Ngqura. While Durban remains the continent’s busiest container port, Ngqura is gaining attention with its high-tech facilities and special economic zones. Together, they serve as a key southern gateway to both African and international markets.

In West Africa, Nigeria is stepping up with the massive Lekki Deep Sea Port near Lagos. This project, which includes a free trade zone, aims to ease congestion in existing ports and create a major export hub. It’s also tied into Nigeria’s goal of becoming a regional manufacturing powerhouse.

Kenya’s Mombasa port is another vital hub, especially for East and Central Africa. Kenya has also invested in the Standard Gauge Railway (SGR), which links Mombasa to the capital Nairobi and beyond. This infrastructure helps move goods quickly to inland countries like Uganda, Rwanda, and South Sudan.

One of the most impressive examples is Morocco’s Tanger Med Port. Located near Europe, Tanger Med has become the largest port in Africa, handling over seven million containers a year. Thanks to its location and state-of-the-art facilities, it plays a major role in connecting Europe, Africa, and Asia.

This shift in logistics matters a lot for global trade. With better infrastructure, Africa is now offering easier access to one of the world’s fastest-growing consumer markets. Africa’s population is expected to reach 2.5 billion by 2050. As incomes rise, so will the demand for food, electronics, vehicles, and more. Logistics hubs are essential to meet that demand, delivering goods faster and at a lower cost.

Additionally, many of these new ports and trade zones are attracting manufacturers. With global companies looking to diversify away from Asia due to pandemic-related disruptions and rising tensions, Africa is becoming an attractive alternative. It offers not just raw materials but also labor, land, and growing domestic markets.

 

Another reason this growth matters is supply chain risk. The pandemic taught businesses a hard lesson overdependence on one region or supplier can be costly. By integrating African hubs into their logistics networks, companies can create more resilient supply chains that have multiple routes and fallback options.

There’s also no shortage of investment. The African Development Bank has pledged over $25 billion toward infrastructure by 2030. Countries like China, the UAE, and members of the European Union are actively funding and building ports, railways, and digital logistics platforms. According to a recent PwC report, the transport and logistics sector in Africa is expected to grow by 8% annually through 2030.

Of course, challenges remain. Corruption, customs delays, and a shortage of skilled logistics workers still exist in many places. Cross-border coordination can also be slow, and digital infrastructure in rural areas still lags behind. But the momentum is there. Trade agreements like the African Continental Free Trade Area (AfCFTA) are working to smooth out these issues by simplifying border processes and encouraging regional cooperation.

In the next five to ten years, Africa’s logistics map will look completely different. Smart ports, rail networks, and digital customs systems will be the norm, not the exception. For global supply chain professionals, this means opportunity. Now is the time to explore sourcing options, build regional partnerships, and rethink logistics strategies to include Africa as a key node in the network.

Africa isn’t just catching up, it’s leapfrogging. With the right investment and collaboration, its logistics hubs could become the heartbeat of 21st-century global trade. The next big supply chain opportunity? It might just be waiting on the African coast.


Explore the latest edition of Journal of Supply Chain Magazine and be part of the JOSC Daily News Bulletin.

Discover all our upcoming events and secure your tickets today.


Journal of Supply Chain is a Hansi Bakis Media brand.

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