Applicability of IGST / GST on goods transferred / sold while being deposited in a warehouse. -reg.
46/2017 Dated:- 24-11-2017 Circular
Customs
Circular No. 46/2017-Customs
F.No: 473/10/2017-LC
Govt. of India
Ministry of Finance
Dept. of Revenue
Central Board of Excise & Customs
North Block, New Delhi
Dated 24th November 2017
To,
All Principal Chief Commissioners / Chief Commissioners / Principal Commissioners / Commissioners of Customs
Subject: Applicability of IGST / GST on goods transferred / sold while being deposited in a warehouse. -reg.
References have been received from the trade regarding levy of IGST/GST on sales of goods deposited in a customs bonded warehouse.
2. Ch IX of the Customs Act provides for deposit of goods into a customs bonded warehouse licensed under section 57 or 58 or 58A without payment of duty and the procedures to be followed with respect to the warehoused goods. Sub-section (5) of section 59 provides that the importer is at liberty to
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h 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.
4. 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 7 of the IGST Act, any supply of imported goods which takes place before they cross the customs frontiers of India, shall be treated as an inter-State supply. Thus, such a transaction of sale/transfer wil
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thereunder and the tax liability shall be reckoned as per section 9 of the CGST Act, 2017.
5.2 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.
6. Difficulties in implementation, if any, may be brought to the notice of the Board
7. Hindi version follows.
(Temsunaro Jamir)
Officer On Special Duty (ICD)
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Document 1
Sale of goods in a Bonded Warehouse and clearance thereof:
ANNEXURE
ILLUSTRATION
Box-A
Goods imported by “A”
on 2nd July 2017.
Importer wants to
deposit the goods in a
bonded warehouse to
defer duty.
Box-B
Importer files
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