Taxability of goods imported into India pending customs clearance – is governed by the Proviso to Section 5(1) and not by the main Section 5(1) of the IGST Act. Accordingly, when goods imported, pending customs clearance, are supplied, the supplier is not liable to pay IGST. The taxability is determined by proviso to Section 5(1) and accordingly, the IGST as leviable under Section 3(7) of the Custom Tariff Act(CTA). Further, the IGST under Section 3(7) of the CTA is leviable at the point when the Customs Duty under Section 12 of the Customs Act is leviable. Therefore, till the point of time Customs Duty is not leviable, IGST under Section 3(7) of CTA read with proviso to Section 5(1) of the IGST Act is not leviable. check more details for Taxability of goods imported into India from below…
Taxability of goods imported into India with some practical case
Some Practical Case in Case of Import
- High Sea Sale of imported goods / Sale in the course of Import- Tax is not Payable as per Section 5(1) but payable as per Proviso to Section 5(1). It means that the person clearing the goods for home consumption liable to pay IGST under Section 3(7) of CTA read with Customs Circular no 33/2017. Supplier of goods making High Sea Sale not liable to pay IGST on such sale.
- Supply made from a Bonded Warehouse to another Bonded Warehouse- Tax is Not Payable as per Section 5(1) and neither as per Proviso to Section 5(1). No tax will be charged
- Supply made from a Bonded Warehouse to EOU- Tax is not Payable as per Section 5(1) but payable as per Proviso to Section 5(1). W.e.f. 13.08.2016 (notification no. 44/2016-Cus), EOU’s delicensed. It means that he person clearing the goods for home consumption liable to pay IGST under Section 3(7) of CTA read with Customs Circular no 33/2017. Basic Customs duty is exempted vide Notification 52/2003. Supplier of goods in the Bonded Warehouse not liable to pay IGST on such sale.
- Supply made from a Bonded Warehouse to a unit in Domestic Tariff Area – Tax is not Payable as per Section 5(1) but payable as per Proviso to Section 5(1). It means that the person clearing the goods for home consumption liable to pay IGST under Section 3(7) of CTA read with Customs Circular no 33/2017. Supplier of goods in the Bonded Warehouse not liable to pay IGST on such sale.
- Supply made from a SEZ to another SEZ – Tax is Not Payable as per Section 5(1) and neither as per Proviso to Section 5(1). No tax will be charged
- Supply made from a SEZ to a unit in Domestic Tariff Area (Goods)- Tax is not Payable as per Section 5(1) but payable as per Proviso to Section 5(1). It means that the person clearing the goods for home consumption liable to pay IGST under Section 3(7) of CTA. Supplier of goods in the SEZ not liable to pay IGST on such sale.
- Supply made from a SEZ to a EOU- Tax is not Payable as per Section 5(1) but payable as per Proviso to Section 5(1). W.e.f. 13.08.2016 (notification no. 44/2016 – Cus) EOU’s are not considered as private licensed warehouse. Therefore, premises of EOU will be treated as a place outside the customs frontiers of India. It means that the person clearing the goods for home consumption liable to pay IGST under Section 3(7) of CTA. Basic Customs duty is exempted vide Notification 52/2003. Supplier of goods in the SEZ not liable to pay IGST on such sale.
- Supply made from a SEZ to Bonded Warehouse – Tax is Not Payable as per Section 5(1) and neither as per Proviso to Section 5(1). No tax will be charged.
Author – CA Jain Alok
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