Customs – Import – Export – SEZ – By: – Kishan Barai – Dated:- 24-7-2017 Last Replied Date:- 27-7-2017 – In the GST regime, IGST and GST Compensation cess will be levied on imports by virtue of sub-sections (7) & (9) of Section 3 of the Customs Tariff Act, 1975. Barring a few commodities such as pan masala, certain petroleum products which attractlevy of CVD, majority of imports would attract levy of IGST. Further, a few products such as aerated waters, tobacco products, motor vehicles etc, would also attract levy of GST Compensation Cess, over and above IGST. IGST andGST Compensation cess, wherever applicable, would be levied on cargo that would arrive on or after 1st July, 2017. It may also be noted that IGST would also be levied on cargo which has arrived prior to 1st July but a bill of entry is filed on or after 1st July 2017.Similarly ex-bond bill of entry filed on or after 1st July 2017 would attract IGST and GST Compensation cess, as applicable.In the case where cargo arriv
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T Act, 2017. The rates applicable to goods of Chapter 98 are as under: • 9801- Project Imports- 18% • 9802- Laboratory Chemicals- 18% • 9803- Passenger baggage – Nil Rate • 9804- Specified Drugs and medicines for personal use- 5% • 9804- Other drugs and medicines for personal use- 12% • 9804- All other dutiable goods for personal use- 28% Likewise, different rates of tax have been notified for goods attracting Compensation Cess which is leviable on 55 item descriptions (of supply). These rates are mostly ad valorem. But some also attract either specific rates (e.g. coal) or mixed rates (ad valorem + specific) as for cigarettes. The coverage of the goods under GST compensation cess isavailable on CBEC website along with their HSN codes and applicable cess rates.The IGST Rates of Goods, Chapter wise IGST rate, GST Compensation Cess rates, IGST Exemption/Concession are available on CBEC website for trade and departmental officers as well. Valuation and method
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include education cess or higher education cess as well as anti-dumping and safeguard duties.The inclusion of anti-dumping duties and safeguard duty in the value for levy of IGST and Compensation Cess is an important change. These were not hitherto included in the value for the levy of additional duty of customs (CVD) or Special Additional Duty (SAD).The IGST paid shall not be added to the value for the purpose of calculating Compensation Cess. Although BCD, Education Cesses and IGST would be applicable in majority of cases, however, for some products CVD, SAD or GST Compensation cess may also be applicable. For different scenarios the duty calculation process has been illustrated in Annexure – I of this document. IV. Changes in import procedures: Importer Exporter Code (IEC): In GST regime, GSTIN would be used for credit flow of IGST paid on import of goods. Therefore, GSTIN would be the key identifier. DGFT in its Trade Notice No. 09 dated 12.06.2017 has stated that PAN would be the
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ime, Customs duties will be exempted on imports made under export promotion schemes namely EPCG, DEEC (Advance License) and DFIA. IGST and Compensation Cess will have to be paid on such imports. The EXIM scrips under the export incentive schemes of chapter 3 of FTP (for example MEIS and SEIS) can be utilised only for payment of Customs duties or additional duties of Customs, on items not covered by GST, at the time of import. The scrips cannot be utilized for payment of Integrated Tax and Compensation Cess. Similarly, scrips cannot be used for payment of CGST, SGST or IGST for domestic procurements. VI. EOUs and SEZ: EOUs/EHTPs/STPs will be allowed to import goods without payment of basic customs duty (BCD) as well additional duties leviable under Section 3 (1) and 3(5) of the Customs Tariff Act. GST would be leviable on the import of input goods or services or both used in the manufacture by EOUs which can be taken as input tax credit (ITC). This ITC can be utilized for payment of GST
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fied under heading 9801 and duty shall be levied @ 18%. IX. Baggage: Full exemption from IGST has been provided on passenger baggage. However, basic customs duty shall be leviable at the rate of 35% and education cess as applicable on the value which is in excess of the duty free allowances provided under the Baggage Rules, 2016. X. Refunds of SAD paid on imports: The need for SAD refunds arose mainly on account of the fact that traders or dealers of imported goods were unable to take credit of this duty (which was a Central tax) while discharging their VAT or Sales tax liability (which was State levy) on subsequent sale of the goods. Unless corrected through a mechanism such as refund (of one of the taxes) this would have resulted in double payment of tax. With the introduction of GST on 01.07.2017, credit of eligible duties in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock, is permissible to registered persons not liable to be re
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however the credit of basic customs duty (BCD) would not be available. In order to avail ITC of IGST and GST Compensation Cess, an importer has to mandatorily declare GST Registration number (GSTIN) in the Bill of Entry. Provisional IDs issued by GSTN can be declared during the transition period. However, importers are advised to complete their registration process for GSTIN as ITC of IGST would be available based on GSTIN declared in the Bill of Entry. Input tax credit shall be availed by a registered person only if all the applicable particulars as prescribed in the Invoice Rules are contained in the said document, and the relevant information, as contained in the said document, is furnished in FORM GSTR-2 by such person. Customs EDI system would be interconnected with GSTN for validation of ITC. Further, Bill of Entry data in non-EDI locations would be digitized and used for validation of input tax credit provided by GSTN. – Reply By KASTURI SETHI – The Reply = Dear Sir, By entering
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ighted with this article. Very useful. Thanks for all your efforts!!.I have a query. EOU plans to import capital goods (machinery) for manufacture. What is the import duties applicable? If IGST is applicable, how we can get refund? There is no DTA sales. In pre-GST scenerio, all import duties on capital goods are exempted to the unit.Please clarify.Thanks and regards,CA Sekhar PN – Reply By JAIPRAKASH RUIA – The Reply = May be import under notification 52/2003-Custom and IGST refund through export under rebate in place of BOND/LUT. – Reply By Kishan Barai – The Reply = An EOU will have to pay the applicable GST on the import or domestic sourcing of inputs (goods or services). The EOUs will continue to get exemption from payment of the basic Customs Duty, however they will have to pay IGST on imports. On the IGST paid on import of inputs, ITC would be available which can be used for payment of GST payable on the goods cleared in the DTA. Refund of the unutilized ITC can also be claimed
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any benefits taken on procurement of inputs from DTA under Chapter 7 of FTP and used in the manufacture of products under DTA sale. Supply of goods from one EOU to another EOU (inter-unit transfer) will require payment of applicable GST. The BCD exemption availed on inputs from the supplier EOU, used in such transferred goods would have to be reversed by the recipient EOU at the time clearance of such goods in DTA. Same provisions apply on sending of Goods for Job work. For GST exempt Goods like Petroleum products, the existing provisions provided under notification no. 52/2003-Cus, notification no. 22/2003-CE and Notification no. 23/2003-CE will continue to apply for import, domestic procurement and domestic clearance. – Reply By JAIPRAKASH RUIA – The Reply = Dear Sir, Whether 52/2003-Custom is not available to EOU for duty free Import of input and capital goods subject to condition of said notification. – Reply By Kishan Barai – The Reply = No, IGST has to be paid post GST – Reply B
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