Skip to main content

Delhi HC allows exporter to import without paying IGST

Delhi HC allows exporter to import without paying IGST
The Delhi High Court has granted interim relief for an exporter, to import goods without payment of the integrated goods and services tax (IGST) to the extent allowed by advance authorisations received by him prior to July 1, when GST was enforced.
Advance authorisation is issued for exporters to allow dutyfree import of inputs which are physically incorporated in export products.
The relief given relates to export orders placed on the petitioner, an exporter of plastic products, before July 1. The next hearing in this case is on February 22.
Prior to GST, import under the Advance Authorisation Scheme was exempt from payment of basic Customs duty, additional Customs duty, education cess, etc.Amajor change since July 1 is additional levy of IGST.
While upfront exemption is extended to basic Customs duty, exporters are required to pay IGST on import and central, state or Union Territory GST (as the case applicable) on domestic procurement; thereafter, they may claimarefund.
The petitioner in this case had contended that suchamechanism adversely affected his working capital, impacting export orders got prior to July 1, for the fulfilment of which he had to undertake import of inputs.
One such export order placed on the petitioner by Walmart Inc, USA, was cited.
The petitioner said with the change brought about by the GST regime, he would have no option but to pay IGST out of own sources, causingaworking capital blockage.
As the petitioner had already used up the overdraft limit with banks, borrowing would have to be done.
Counsel for the Customs department said the petitioner could seek refund of the IGST after completion of the export obligation.
Hence, there was no ground forareal grievance.
The petitioner replied that the prospect of IGST being ultimately refunded was little consolation —he required liquidity to discharge the additional levy of IGST, failing which the import would get blocked.
Abhishek Rastogi of Khaitan &Co, the petitioner´s counsel, said while the order was specific to the petitioner, it did lay down the foundation for benefits that should go to exporters.
After GST implementation, he said, the commerce ministry had asked the finance ministry to ensure export benefits continued as these were prior to GST. The finance ministry had not acted on this representation, resulting in exporters´ loss of working capital onalarge scale.
The interim relief, he added, wasa “beginning for the two ministries to paveaclear path for exporters”.
The Business Standard, New delhi, 14th September 2017

Comments

Popular posts from this blog

At 18%, GST Rate to be Less Taxing for Most Goods

About 70% of all goods and some consumer durables likely to cost less

A number of goods such as cosmetics, shaving creams, shampoo, toothpaste, soap, plastics, paints and some consumer durables could become cheaper under the proposed goods and services tax (GST) regime as most items are likely to be subject to the rate of 18% rather than the higher one of 28%.

India is likely to rely on the effective tax rate currently applicable on a commodity to get a fix on the GST slab, said a government official, allowing most goods to make it to the lower bracket.

For instance, if an item comes within the 12% excise slab but the effective tax is 8% due to abatement, then the latter will be considered for GST fitment.

Going by this formulation, about 70% of all goods could fall in the 18% bracket.

The GST Council has finalised a four-tier tax structure of 5%, 12%, 18% and 28% but has left room for the highest slab to be pegged at 40%. A committee of officials will work out the fitment and the council…

Coffee-Toffee, the GST Debate Continues

Hundreds of crores of rupees in the form of taxes ride on the exact categorisation of products Is Parachute hair oil or edible oil? Is KitKat a chocolate or a biscuit? Is a Vicks tablet medicament or confectionery? For the taxpayer and the tax collector, this is much more than an exercise in semantics -hundreds of crores of rupees ride on the exact categorisation.
As the government moves closer to rolling out the goods and services tax (GST) on July 1, many such distinctions are being debated so that no ambiguity remains. Not just that, the government is revisiting old tax cases that were lost over product categorisation, according to people with knowledge of the matter, presumably with a view to making sure that revenue collections can be maximised. “In the past, several tax officers had challenged some of the product categorisations, including those in the retail segment, but lost out in court or at appellate level,“ said one of the persons. “Now we have a chance to go ahead with speci…

Deposit gush:-CA Institute Bats for Special Audit