Import of Goods for Builders and GST
By: – Manoj Kasture
Customs – Import – Export – SEZ
Dated:- 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 – {e
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f Basic Customs Duty (BCD)
This is levied on all goods imported or exported from India. Duty is as 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 i
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se duty as may be notified”. Post GST, this is abolished on majority of goods.
Valuation for Duty under Sec 3(1) and 3(3) of Customs Tariff Act – 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 wou
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mported goods AND
* Basic Customs Duty As per Sec 12 of Customs Act
* Any additional duty payable
Sec 3(9) of Customs Tariff Act 1975 – Imposing GST Compensation Cess (wef 1st July 17)
GST Compensation Cess will be applicable 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
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