Skip to main content

IGST to be levied only when goods are brought for customs clearance

By

The integrated goods and services tax (IGST) would not be levied on sale of goods on high seas but would be charged when they are brought for customs clearance, authorities have clarified, much to the relief of oil and gas, power and telecom companies. 
The Central Board of Excise and Customs (CBEC) has issued a circular to this effect after receiving references on the issue as all inter-state transactions are subject to IGST. 
'High sea sale' is a common trade practice where in original importer sells goods to a third person before they are customs cleared. Final customs clearance is filed by the final owner. CBEC has said IGST would be required to be levied only once at the time of importation of goods, which is when goods are cleared by customs. 
It also clarified that value addition accruing in each high sea sale transaction shall form part of the value on which IGST would be levied at the time of clearance. 
This means that IGST would be payable on the value for the last buyer in the chain. The importer would be required to furnish the entire chain of documents such as original invoice, high-seas-sale contract, details of service charges, commission paid, etc. to establish a link between the first contracted price of the goods and the last transaction. 
Tax experts said the circular has ended the confusion on the issue, but the government should clarify whether such sales trigger reversal of input credit. 
"There was lot of confusion in the industry on the taxability of high seas sale, i.e., whether it is taxable twice or only once in the hands of the ultimate importer," said Abhishek Jain, tax partner at EY India. "The circular provides logical and right clarity that high seas sale should be taxed only once in the hands of ultimate importer."
The Economic Times, New Delhi, 03rd August 2017

Comments

Post a Comment

Popular posts from this blog

RBI deputy governor cautions fintech platform lenders on privacy concerns during loan recovery

By
  India's digital lending infrastructure has made the loan sanctioning system online. Yet, loan recovery still needs a “feet on the street” approach, Swaminathan J, deputy governor of the Reserve Bank of India, said at a media event on Tuesday, September 2, according to news agency ANI.According to the ANI report, the deputy governor flagged that fintech operators in the digital lending segment are giving out loans to customers with poor credit profiles and later using aggressive recovery tactics.“While loan sanctioning and disbursement have become increasingly digital, effective collection and recovery still require a 'feet on the street' and empathetic approach. Many fintech platforms operate on a business model that involves extending small-value loans to customers often with poor credit profiles,” Swaminathan J said.   Fintech platforms' business models The central bank deputy governor highlighted that many fintech platforms' business models involve providing sm
Post a Comment
Read more

Credit card spending growth declines on RBI gaze, stress build-up

By
  Credit card spends have further slowed down to 16.6 per cent in the current financial year (FY25), following the Reserve Bank of India’s tightening of unsecured lending norms and rising delinquencies, and increased stress in the portfolio.Typically, during the festival season (September–December), credit card spends peak as several credit card-issuing banks offer discounts and cashbacks on e-commerce and other platforms. This is a reversal of trend in the past three financial years stretching to FY21 due to RBI’s restrictions.In the previous financial year (FY24), credit card spends rose by 27.8 per cent, but were low compared to FY23 which surged by 47.5 per cent. In FY22, the spending increased 54.1 per cent, according to data compiled by Macquarie Research.ICICI Bank recorded 4.4 per cent gross credit losses in its FY24 credit card portfolio as against 3.2 per cent year-on-year. SBI Cards’ credit losses in the segment stood at 7.4 per cent in FY24 and 6.2 per cent in FY23, the rep
Post a Comment
Read more

India can't rely on wealthy to drive growth: Ex-RBI Dy Guv Viral Acharya

By
  India can’t rely on wealthy individuals to drive growth and expect the overall economy to improve, Viral Acharya, former deputy governor of the Reserve Bank of India (RBI) said on Monday.Acharya, who is the C V Starr Professor of Economics in the Department of Finance at New York University’s Stern School of Business (NYU-Stern), said after the Covid-19 pandemic, rural consumption and investments have weakened.We can’t be pumping our growth through the rich and expect that the economy as a whole will do better,” he said while speaking at an event organised by Elara Capital here.f there has to be a trickle-down, it should have actually happened by now,” Acharya said, adding that when the rich keep getting wealthier and wealthier, they have a savings problem.   “The bank account keeps getting bigger, hence they look for financial assets to invest in. India is closed, so our money can't go outside India that easily. So, it has to chase the limited financial assets in the country and
Post a Comment
Read more