APPLICABILITY OF IGST/GST ON GOODS TRANSFERRED/SOLD WHILE BEING DEPOSITED IN WAREHOUSE
By: – DR.MARIAPPAN GOVINDARAJAN
Goods and Services Tax – GST
Dated:- 8-12-2017
Depositing of goods in warehouses
Chapter IX of the Customs Act, 1962 ('Act' for short) provides for warehousing. This chapter provides for deposit of goods into a customs bonded warehouse. A warehouse is licensed under section 57of the Act as a public warehouse; under section 58 of the Act as a private warehouse; under section 58A of the Act as a special warehouses. The goods may be deposited in such warehouses without payment of duty. Section 59(5) provides that where the whole of the goods or any part thereof are transferred to another person. For this, the transferee shall execute a bond in a sum equal to thrice the amount of duty assessed on such goods. The Assistant Commissioner of Customs or Deputy Commissioner of Customs may permit an importer to execute a general bond in such amount as the Assista
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for home consumption under section 46, on the date on which a bill of entry in respect of such goods is presented under that section;
* in the case of goods cleared from a warehouse under section 68, on the date on which a bill of entry for home consumption in respect of such goods is presented under that section;
* in the case of any other goods, on the date of payment of duty :
* if a bill of entry has been presented before the date of entry inwards of the vessel or the arrival of the aircraft 1[or the vehicle] by which the goods are imported, the bill of entry shall be deemed to have been presented on the date of such entry inwards or the arrival, as the case may be.
There is no provision to vary the assessable value of the goods at ex-bond stage unless they are such goods on which tariff valuation applies. Hence, basic customs duty and IGST shall be paid on the imported goods at the stage of exbonding on the value determined under Section 14 of the Act.
Sale/transfer of goo
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ditional taxable event
The circular indicated that in respect of goods stored in a customs bonded warehouse, there is a possibility that certain cases may involve an additional taxable event, if a transfer of ownership of warehoused goods takes place between the importer and another person, before clearance of goods, whether for home consumption or export.
Deferment of customs duty
The circular clarified that so long as the goods remain deposited in the warehouse the customs duty to be collected shall remain deferred. It is only when such goods are ex-bonded under section 68 of the Act, shall the deferred duty be collected at the value as had been determined under section 14 of the Act in addition to the integrated tax leviable.
Example
The circular gives on example in bond sales and clearance thereof.
* Goods imported by A on 02.07.2017 – importer wants to deposit the goods in the bonded warehouse to defer customs duty;
* Importer files an 'into-bond bill of entry' and the go
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