Exporter granted relief for duty-free imports pre-GST, exempt from additional IGST post-GST

The court granted interim relief to the petitioner, an exporter, allowing duty-free imports under the Advance Authorization Scheme for pre-GST export orders, exempting them from the additional IGST payment post 1st July 2017. The Customs Department argued for mandatory IGST post-GST, while the Ministry of Commerce remained relatively silent. The court acknowledged the petitioner's financial strain and working capital blockage, requiring an affidavit and verification for duty-free imports. The judgment emphasized the exporter's inability to pass on extra costs to overseas buyers, setting a final hearing to address broader legal aspects.

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Issues:
1. Interpretation of the Advance Authorization Scheme under the Foreign Trade Policy 2015-2020.
2. Impact of the Goods and Service Tax (GST) regime on duty exemptions for exporters.
3. Challenge regarding the additional levy of Integrated Goods and Service Tax (IGST) on imports for fulfilling export orders placed before 1st July 2017.
4. Legal recourse sought by the Petitioner to avoid payment of additional IGST and liquidity concerns.
5. Response of the Customs Department and the Ministry of Commerce to the Petitioner's grievance.
6. Court's analysis of the situation and grant of interim relief to the Petitioner.

Analysis:
The judgment dealt with the interpretation of the Advance Authorization Scheme (AAS) under the Foreign Trade Policy 2015-2020, which allowed duty-free import of inputs for export products. The petitioner, an exporter, raised concerns over the impact of the Goods and Service Tax (GST) regime, specifically the additional levy of Integrated Goods and Service Tax (IGST) on imports post 1st July 2017. The petitioner faced liquidity issues due to the IGST payment requirement for fulfilling export orders placed before the GST regime. The court acknowledged the petitioner's plight and granted interim relief, allowing imports without additional IGST for pre-GST export orders, subject to specified conditions.

The Customs Department contended that the exemptions under the earlier Notification continued, but post-GST imports attracted mandatory IGST payment. The Ministry of Commerce did not provide significant comments on the matter. The petitioner sought relief from the additional IGST levy on imports for pre-GST export orders, emphasizing the financial strain and working capital blockage. The court found merit in the petitioner's case, granting permission for duty-free imports under Advance Authorizations issued before 1st July 2017, subject to verification and compliance with terms.

The court's interim direction required the petitioner to submit an affidavit undertaking to pay IGST if the petition failed, along with lists of valid Advance Authorizations and pre-GST export orders. The relief applied only to imports for pre-GST export orders. The judgment highlighted the exporter's inability to pass on additional costs to overseas buyers post-acceptance of export orders, potentially jeopardizing contracts. The court set a date for final hearing to address the broader legal aspects of the case, allowing the petitioner to file a rejoinder to the counter-affidavit submitted by the Respondents.

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