Applicability of IGST / GST on goods transferred / sold while being deposited in a warehouse
PUBLIC NOTICE No. 38/2017 Dated:- 30-11-2017 Trade Notice
Customs
OFFICE OF THE COMMISSIONER OF CUSTOMS,
CITY CUSTOMS COMMISSIONERATE, P.B No. 5400, C.R.BUILDING,
QUEEN'S ROAD, BENGALURU – 560 001
C.N0. VIII/09/41/2017 City cus Tech
Date: 30.11.2017
PUBLIC NOTICE No. 38/2017
Subject: Applicability of IGST / GST on goods transferred / sold while being deposited in a warehouse-Reg.
Attention of all Customs Brokers, Exporters, Importers, Members of the Trade and other stake holders is invited to Board's Circular No. 46/2017 -Customs dated 24.11.2017 regarding applicability of IGST / GST on goods transferred / sold while being deposited in a warehouse.
2. References have been received from the trade regarding levy of IGST/GST on sales of goods deposited in a customs bonded warehouse.
3. Ch IX of the Customs Act provides for deposit of goods into a customs bonded warehouse lic
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ate of duty or tariff valuation for an ex-bond Bill of Entry shall be the date on which it is filed. There is no provision to vary the assessable value of the goods at the ex-bond stage unless they are such goods on which tariff valuation applies. Therefore, duties of customs (BCD + IGST) shall be paid on the imported goods at the stage of ex-bonding on the value determined under section 14 of the Customs Act.
5. However, the transaction of sale / transfer etc. of the warehoused goods between the importer and any other person may be at a price higher than the assessable value of such goods. Such a transaction squarely falls within the definition of “supply” as per section 7 of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as, “CGST Act”) and shall be taxable in terms of section 9 of the CGST Act read with section 20 of the Integrated Goods and Services Tax Act, 2017 (hereinafter referred to as, “IGST Act”). It may be noted that as per sub-section (2) of section
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d by the importer to another person, the transaction will be subject to payment of IGST at the value determined as per section 20 of the IGST Act read with section 15 of the CGST Act, 2017 and the rules made thereunder and the tax liability shall be reckoned as per section 9 of the CGST Act, 2017.
6.2 However, it may be noted that so long as such goods remain deposited in the warehouse the customs duty to be collected shall remain deferred. Further, it is only when such goods are ex-bonded under section 68, shall the deferred duty be collected, at the value as had been determined under section 14 of the Customs Act, 1962 in addition to IGST leviable, as indicated at Para 5.1 above. An illustrative chart on in bond sales and clearance thereof is attached as Annexure.
7. Difficulties, if any, faced in the implementation of this Public Notice may be brought to the notice of this office.
(PARAG CHAKO BORKAR)
COMMISSIONER
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Document 1
Sale of goods in a Bonded Warehouse an
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