Subject: Applicability of IGST / GST on goods transferred / sold while being deposited in a warehouse. -reg.
41 /2017 Dated:- 28-11-2017 Trade Notice
Customs
OFFICE OF THE COMMISSIONER OF CUSTOMS
NEW CUSTOMS HOUSE, PANAMBUR, MANGALURU – 575 010
Tel: 0824-2408164 Fax: 0824-2407100 E-mail:commr-cusmnglr@nic.in
C.No. S-26/04/2016 Cus Tech
Date: 28.11.2017
PUBLIC NOTICE NO. 41 /2017
Subject: Applicability of IGST / GST on goods transferred / sold while being deposited in a warehouse. -reg.
Attention of the Importers, Customs Brokers, Steamer Agents, Liners and the members of Trade is invited to the Board's Circular No.46/2017- Customs dated 24.11.2017 on the above subject.
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 this office.
( Dr. M. Subramanyam )
COMMISSIONER
ANNEXURE to Public Notice No. 41/2017 dated 28.11.2017
Sale of goods in a Bonded Warehouse and clearance thereof:
ILLUSTRATION
Box-I
Box-II
Box-III
Box-IV
Goods imported by “A” on 2nd July 2017. Importer wants to deposit the goods in a bonded warehouse to defer duty.
Importer files an “in
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