Customs – 41 /2017 – Dated:- 28-11-2017 – 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 transfer the ownership of such goods to another person while the goods remain deposited in the warehouse. 3. It is to be noted that the va
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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 will be subject to IGST under the IGST Act. The value of such supply shall be determined in terms of section 15 of the CGST Act read with section 20
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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 into bond bill of entry and the goods are deposited in a Bonded Warehouse. BCD and IGST (Section 3(7) of Customs Tariff Act 1975) are deferred. Illustration of duty defe
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