Import of Goods for Builders and GST
By: – Manoj Kasture
Customs – Import – Export – SEZ
Dated:- 29-9-2017<\/p>\n
IMPORT OF GOODS, DUTIES APPLICABLE AND CREDIT
\nGST has brought about big change in levies related to Imports, Exports and more importantly the Credit permissibility.
\nBASIC PROVISIONS OF CUSTOMS ACT, CUSTOMS TARIFF ACT, Integrated GST (IGST) and All types of Customs Duty and IGST, GST Compensation Cess:
\n * Basic Customs Duty – Sec 12 of Customs Act for Levy of Basic Customs Duty (BCD)
\n * Valuation of Goods for Customs Duty – Sec 14 of Customs Act
\n * Additional Duty (Also called CVD) – Sec 3(1) of Customs Tariff Act 1975 – {Equal to Excise Duty}
\n * 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)
\n * Sec 3(2) of Customs Tariff Act 1975 – Valuation of Goods for Duty under Sec 3(1) and Sec 3(3)
\n * Special Additional Duty (SAD) – Sec 3(5) of Customs Tariff Act – {e<\/p>\n
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\nThis is levied on all goods imported or exported from India. Duty is as per Customs Tariff Act .
\nPoint to note:
\n * BCD is applicable only on GOODS. Import of Services is not subjected to BCD.
\n * BCD (Basic Customs Duty) continues in GST regime. Sec 12 of Customs Act for levy of BCD also continues in GST Regime.
\n * Credit of BCD is not permitted.
\n\tValuation of Goods Imported or Exported as per Sec 14 of Customs Act 1962:
\nSec 14 deals with valuation of Goods imported or exported.
\nTransaction value is elaborated here. It means price paid or payable for goods imported or exported subject to two conditions:
\n * Price is sole criteria
\n * Both parties are not related
\n Transaction value includes commissions and brokerage, engineering, design works, royalties, licence fees, cost of transportation, insurance, loading, unloading and handline charges.
\n Transaction value related provisions under Customs Act continue even post 1st July 17 and please note that i<\/p>\n
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\n\tValuation for Duty under Sec 3(1) and 3(3) of Customs Tariff Act – Sec 3(2) of Customs Tariff Act (CTA)
\nCVD and Additional Duty will be applicable on the summation of the following:
\n * Value of Goods imported
\n * Basic Customs Duty as per Sec 12 of Customs Act
\nNot Included:
\n * CVD as per Sec 3(1) of Customs Tariff Act
\n * Part Additional Duty as per Sec 3(3) of Customs Tariff Act
\n * Special Additional Duty (SAD) – Sec 3(5) of Customs Tariff Act
\n * Safeguard Duty – Sec 8B of Customs Tariff Act
\n * Anti-Dumping Duty – Sec 9A of Customs Tariff Act
\n * IGST – Sec 3(7) of Customs Tariff Act
\n * GST Compensation Cess – Sec 3(9) of Customs Tariff Act
\n\tSpecial Additional Duty (SAD) – Sec 3(5) of Customs Tariff Act
\nSAD equal to State Sales Tax or VAT is levied. These are notified. Post GST, the list of Goods attracting SAD is very small.
\nFor our business, none of our materials or capital Goods wou<\/p>\n
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\n * Basic Customs Duty As per Sec 12 of Customs Act
\n * Any additional duty payable
\n\tSec 3(9) of Customs Tariff Act 1975 – Imposing GST Compensation Cess (wef 1st July 17)
\nGST Compensation Cess will be applicable on any imported article if such cess is notified and applicable on the goods in India.
\n\tCredit of IGST – Sec 20 of IGST Act
\nAll provisions of Credit as per CGST Act will apply for IGST.
\n\tCredit of Cess – Sec 11 of GST Compensation to Cess Act 2017
\nCredit of Cess is permitted and governed by CGST Act.
\n\tKey difference between pre-GST and post GST Credit Eligibility for builders:
\nDuty
\nCredit Eligibility Pre-GST
\nCredit Eligibility Post GST
\nBasic Customs Duty – Sec 12 of Customs Act
\nCredit Disallowed
\nNo credit allowed
\nCVD – Sec 3(1) of Customs Tariff Act
\nCredit Allowed in 2 years
\nNot applicable for our materials and Capital Goods
\nSAD – Sec 3(5) of Customs Tariff Act
\nCredit Disallowed
\nSame as above
\nIGST – Sec 3(7) of Customs Tariff Act
\nDid<\/p>\n
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