Customs – Import – Export – SEZ – By: – Manoj Kasture – Dated:- 29-9-2017 Last Replied Date:- 29-9-2017 – IMPORT OF GOODS, DUTIES APPLICABLE AND CREDIT GST has brought about big change in levies related to Imports, Exports and more importantly the Credit permissibility. BASIC PROVISIONS OF CUSTOMS ACT, CUSTOMS TARIFF ACT, Integrated GST (IGST) and All types of Customs Duty and IGST, GST Compensation Cess: Basic Customs Duty – Sec 12 of Customs Act for Levy of Basic Customs Duty (BCD) Valuation of Goods for Customs Duty – Sec 14 of Customs Act Additional Duty (Also called CVD) – Sec 3(1) of Customs Tariff Act 1975 – {Equal to Excise Duty} Additional Duty (Part excise Duty as may be notified) – Sec 3(3) of Customs Tariff Act 1975 – Additional Duty (Part excise Duty as may be notified) Sec 3(2) of Customs Tariff Act 1975 – Valuation of Goods for Duty under Sec 3(1) and Sec 3(3) Special Additional Duty (SAD) – Sec 3(5) of Customs Tariff Act – {equal to VAT} Import of Goods – Sec 2(10) of
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per Customs Tariff Act . Point to note: BCD is applicable only on GOODS. Import of Services is not subjected to BCD. BCD (Basic Customs Duty) continues in GST regime. Sec 12 of Customs Act for levy of BCD also continues in GST Regime. Credit of BCD is not permitted. Valuation of Goods Imported or Exported as per Sec 14 of Customs Act 1962: Sec 14 deals with valuation of Goods imported or exported. Transaction value is elaborated here. It means price paid or payable for goods imported or exported subject to two conditions: Price is sole criteria Both parties are not related Transaction value includes commissions and brokerage, engineering, design works, royalties, licence fees, cost of transportation, insurance, loading, unloading and handline charges. Transaction value related provisions under Customs Act continue even post 1st July 17 and please note that in GST similar provisions for Valuation are made. Additional Duty (Also called CVD) equal to Excise – Sec 3(1) of Customs Tariff Ac
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– Sec 3(2) of Customs Tariff Act (CTA) CVD and Additional Duty will be applicable on the summation of the following: Value of Goods imported Basic Customs Duty as per Sec 12 of Customs Act Not Included: CVD as per Sec 3(1) of Customs Tariff Act Part Additional Duty as per Sec 3(3) of Customs Tariff Act Special Additional Duty (SAD) – Sec 3(5) of Customs Tariff Act Safeguard Duty – Sec 8B of Customs Tariff Act Anti-Dumping Duty – Sec 9A of Customs Tariff Act IGST – Sec 3(7) of Customs Tariff Act GST Compensation Cess – Sec 3(9) of Customs Tariff Act Special Additional Duty (SAD) – Sec 3(5) of Customs Tariff Act SAD equal to State Sales Tax or VAT is levied. These are notified. Post GST, the list of Goods attracting SAD is very small. For our business, none of our materials or capital Goods would attract SAD post GST. Import of Goods – Sec 2(10) of IGST Act Import of Goods as per IGST Act means bringing Goods into India from place outside India. In GST, only if Goods when being brought t
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e on any imported article if such cess is notified and applicable on the goods in India. Credit of IGST – Sec 20 of IGST Act All provisions of Credit as per CGST Act will apply for IGST. Credit of Cess – Sec 11 of GST Compensation to Cess Act 2017 Credit of Cess is permitted and governed by CGST Act. Key difference between pre-GST and post GST Credit Eligibility for builders: Duty Credit Eligibility Pre-GST Credit Eligibility Post GST Basic Customs Duty – Sec 12 of Customs Act Credit Disallowed No credit allowed CVD – Sec 3(1) of Customs Tariff Act Credit Allowed in 2 years Not applicable for our materials and Capital Goods SAD – Sec 3(5) of Customs Tariff Act Credit Disallowed Same as above IGST – Sec 3(7) of Customs Tariff Act Did not exist Credit Allowed GST Compensation Cess – Sec 3(9) of Customs Tariff Act Did not exist Credit Allowed Whether credit on Inputs (Goods for Construction) permitted ?? NO YES Whether credit on Capital Goods permitted ?? To extent of CVD only IGST Credit
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