HC notice to govt on double taxation
The Delhi High Court has issued notices to the Union government, the GST Council and the Central Board of Excise and Customs (CBEC) over the issue of double taxation on imported goods sold from one Customsbonded warehouse to another.
The matter would come up for hearing on March 8.Abhishek ARastogi of Khatian &Co said the issue relates toaCustoms circular that has raised fears of the government imposing integrated goods and services tax (GST) twice on these kinds of transaction.
Also, the company paying the taxes will not be able to get input tax credit, he said.Suppose a company imports goods and keeps it in its Customs bonded warehouse.It then sells it to another company which keeps the goods in its own bonded warehouse.The second company will have to pay integrated GST (IGST) twice and Customs duty.
Also since the first company has not paid duties, the second one will not get the credit.Petitioner Aditya Mody of Devashish Polymers said, “It will become very difficult to sell goods while those are in bonded premises.” The CBEC had issuedacircular clarifying that any supply of imported goods taking place before the goods crosses Customs frontiers of India should be treated as an interstate supply and such transaction for sale and transfer would be subject to IGST. This is without prejudice to the levy of Customs duty and collection of duty at exbound stage.
The industry is worried since it would impact its cash flow and compliance.The impact would be on the warehousing models, including impact on supplies from special economic zones.
Meanwhile, Finance Minister Arun Jaitley introduced the GST (Compensation to States) Amendment Bill, 2017 in the Lok Sabha.The Bill would replace an ordinance in which tax rates on various motor vehicles were hiked toamaximum of 25 per cent under the GST.
The matter would come up for hearing on March 8.Abhishek ARastogi of Khatian &Co said the issue relates toaCustoms circular that has raised fears of the government imposing integrated goods and services tax (GST) twice on these kinds of transaction.
Also, the company paying the taxes will not be able to get input tax credit, he said.Suppose a company imports goods and keeps it in its Customs bonded warehouse.It then sells it to another company which keeps the goods in its own bonded warehouse.The second company will have to pay integrated GST (IGST) twice and Customs duty.
Also since the first company has not paid duties, the second one will not get the credit.Petitioner Aditya Mody of Devashish Polymers said, “It will become very difficult to sell goods while those are in bonded premises.” The CBEC had issuedacircular clarifying that any supply of imported goods taking place before the goods crosses Customs frontiers of India should be treated as an interstate supply and such transaction for sale and transfer would be subject to IGST. This is without prejudice to the levy of Customs duty and collection of duty at exbound stage.
The industry is worried since it would impact its cash flow and compliance.The impact would be on the warehousing models, including impact on supplies from special economic zones.
Meanwhile, Finance Minister Arun Jaitley introduced the GST (Compensation to States) Amendment Bill, 2017 in the Lok Sabha.The Bill would replace an ordinance in which tax rates on various motor vehicles were hiked toamaximum of 25 per cent under the GST.
GST more primitive than VAT
The hurried launch of the goods and services tax (GST) without proper infrastructure in place has made the indirect tax system more “primitive” than the valueadded tax (VAT) regime, West Bengal Finance Minister Amit Mitra said. The Centre, he said, is using ledgers for manual record of refunds due to lack of interface between the GST Network and Custom electronic data interchange as well as the Directorate General of Foreign Trade.
70 antiprofiteering cases filed
As many as 70 complaints have been filed with the AntiProfiteering Authority, which deals with cases under the GST regime, the finance ministry said on Friday.In a written reply to the Lok Sabha, Minister of State for Finance Shiv Pratap Shukla said that 45 complaints are from Haryana, while the rest are from 10 other states.
The Business Standard, New Delhi, 23rd December 2017
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