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Jayanta Bandyopadhyay   28 January 2023

Taxation of excess freight profit

We are exporting Machinery equipments under CIF / CFR delivery terms and making a very good profit margin under the heads Freight and Insurance vis a vis respective amount actually declared in Shipping Bill. This profit margin is in addition to our normal business profit wrt cargo parcel invoicing.

Does it anyway violate Customs, FEMA, Income Tax Rules?

Kindly guide.

Thanks & Regards,

Jayanta Bandyopadhyay 

West Bengal 



 2 Replies

Harendra Kumar (A Practicing Lawyer)     25 October 2023

Such profit is only under the preview of Income Tax under Other Income.  

Heet Shah   11 November 2023

Since it is current account transaction it is not restricted as such under FEMA provicions , Export of machinery is also not restricted under customs, FTP unless any specific benifit is availed under any such Law . Therefore there is no violation as such However detailed analysis shall be done to satisfy in this perspect.    

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