2018 (4) TMI 583 – AUTHORITY FOR ADVANCE RULING – KERALA – 2018 (12) G. S. T. L. 395 (A. A. R. – GST), [2018] 2 GSTL (AAR) 49 (AAR) – Levy of GST IGST – high sea sale – supply from one country to another country without bringing the goods into India – goods sold to the company in USA, where goods sold are shipped directly from China to USA without entering India – On the sale of goods to the company in USA, where goods sold are shipped directly from China to USA without entering India – goods procured from China not against specific export order – sale of goods from Netherlands warehouse to their end customers in and around Netherlands, without entering India.
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Held that:- the integrated tax on goods imported into India shall be levied and collected at the point when duties of customs are levied on the said goods under Section 12 of the Customs Act, 1962 i.e.-on the date determined as per provisions of Section 15 of the Customs Act, 1962.
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Circular 33/2017-Customs dated 01.0
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lands, after being procured from China, to customers, in and around Netherlands, as the goods are not imported into India at any point. – Application dated 29.01.2018 – CT/2275/18-C3 – Dated:- 26-3-2018 – Senthil Nathan S, IRS Member GST and N. Thulaseedharan Pillai Member SGST ORDER M/s. Synthite Industries Ltd, Synthite Valley, Kadayiruppu P O, Kolenchery, Ernakulam District, Kerala 682311 (hereinafter called the applicant) is a registered person under GST having GSTN: 32AADCS5616E1ZQ. 2. They are in the business of trading in spices and spice products. They have two modes of transactions. In the first kind, the applicant receives order from a customer in USA for the supply of spice products. They place a corresponding order to a supplier in China for supplying the goods ordered by the customer in USA. The supplier in China, based on the request of the applicant, ship the goods directly to the customer in USA. In other words, the goods do not come to India. The Chinese supplier issue
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obtained necessary permission from Reserve Bank of India. The applicant wants to buy materials from a company in China in bulk and store it in the presidential warehouse in Netherlands for subsequent delivery to various customers in and around the country as small and medium lots based on demand. The material is not coming to India at any point. The Chinese supplier will invoice the applicant for which payment will be given in due Subsequently, the warehouse authorities will arrange split deliveries to their Various overseas customers as per their instructions. The applicant would issue invoice to the ultimate customers and collect the proceeds in foreign exchange. 4. The applicant in his application dated 29.01.2018 has raised following issues for determination by the Authority; 1. Whether on procuring goods from China, in a context where the goods purchased are not brought into India, is GST payable by them? 2. On the sale of goods to the company in USA, where goods sold are shipped
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turnover is more than ₹ 1500 crores. They have export trading house status granted by the Ministry of Commerce and Industry, Government of India. They mainly purchase spices such as pepper, ginger, cardamom, nutmeg, chillies, turmeric, etc as raw materials and extract them with solvents / chemicals to produce spice oleoresins. They are having manufacturing facilities at Kerala, Tami Nadu, Karnataka and Andhra Pradesh. The applicant submitted that around 80% of their turnover is from exports and the foreign customers place order for various products. 7. The applicant also submitted copies of the purchase order issued by them to the Chinese supplier; the Invoice issued by the Chinese supplier; the Bill of Lading from China to USA and the invoice issued by the applicant to their customer in USA. 8. On the basis of the facts disclosed in the application, the oral and written submissions made at the time of personal hearing and the documents produced during the personal hearing, it wa
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cent, as may be notified by the Government on the recommendations of the Council and collected in such manner as may be prescribed and shall be paid by the taxable person; Provided that the integrated tax on goods imported into India shall be levied and collected in accordance with the provisions of Section 3 of the Customs Tariff Act, 1975, on the value determined under the said Act at the point when duties of customs are levied on the said goods under Section 12 of the Customs Act, 1962. 10. The Customs Tariff Act, 1975 was amended by The Taxation Laws Amendment Act, 2017 by introducing sub-section (7) in Section 3 of the Customs Tariff Act, 1975 with effect from 01.07.2017 to enable collection of integrated tax on the goods imported. The relevant provisions of the amended Section 3 of the Customs Tariff Act, 1975 reads as follows; "(7) Any article which is imported into India shall, in addition, be liable to integrated tax at such rate, not exceeding forty per cent as is leviab
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ection (7) or the cess Referred to in sub-section (9). (12) The provisions of the Customs Act, 1962 and the rules and regulations made thereunder, including those relating to drawbacks, refunds and exemption from duties shall, so far as may be, apply to the duty or tax or cess, as the case may be, chargeable under this section as they apply in relation to the duties leviable under that Act. The relevant provisions of the Customs Act, 1962 are reproduced below; SECTION 12.: Dutiable goods. – (1) Except as otherwise provided in this Act, or any other law for the time being in force; duties of customs shall be levied at such rates as may be specified under the Customs Tariff Act 1975, or any other law for the time being in force, on goods imported into, or exported from, India. (2) The provisions of sub-section (1) shall apply in respect of all goods belonging to Government as they apply in respect of goods not belonging to Government. SECTION 15.: Date for determination of rate of duty a
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ng of the above provisions of the IGST Act, 2017, the Customs Tariff Act, 1975, and the Customs Act, 1962, it is evident that the integrated tax on goods imported into India shall be levied and collected at the point when duties of customs are levied on the said goods under Section 12 of the Customs Act, 1962 i.e.-on the date determined as per provisions of Section 15 of the Customs Act, 1962. 11. When a question regarding the leviability of Integrated Goods and Services Tax [IGST] on High Sea Sales of imported goods and point of collection thereof was raised before the Central Board of. Excise and Customs [CBEC], the CBEC by Circular No. 33/2017-Customs dated 01.08.2017had clarified as follows; Subject: Leviability of Integrated Goods and Services Tax (IGST) on High Sea Sales of imported goods and point of collection thereof-regarding Reference has been received in the Board regarding clarity on Leviability of Integrated Goods and Services Tax (IGST) on High Sea Sales of imported good
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also separately under Section 5 of The Integrated Goods and Services Tax Act, 2017. 4. GST council has deliberated the levy of Integrated Goods and Services Tax on high sea sales in the case of imported goods. The council has decided that IGST on high sea sale (s) transactions of imported goods, whether one or multiple, shall be levied and collected only at the time of importation i.e. when the import declarations are filed before the Customs authorities for the customs clearance purposes for the first time. Further, value addition accruing in each such high sea sale shall form part of the value on which IGST is collected at the time of clearance. 5. The above decision of the GST council is already envisioned in the provisions of sub-section (12) of section 3 of Customs Tariff Act, 1975 inasmuch as in respect of imported goods, all duties, taxes, cessess etc shall be collected at the time of importation i.e. when the import declarations are filed before the customs authorities for the
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