section 15(2)(d) included in value of transaction-taxes paid

[Guest]

Dear sir,

As per section 15(2)(d) of CSGT/SGST Act 2016 , any taxes duties etc are to be included in the transaction value for applying GST rate tax. Does this mean, in case of Import customs duty shall part of transaction value while applying IGST rate. If so, whether still cascading exists.

thank you

[Ganeshan Kalyani]

Sir, Section 15 (2)(d) of GST Act states that, 'any taxes, duties, fees and charges levied under any statute other than the SGST Act or the CGST Act or the IGST Act;'

The above provision states that any taxes other than the GST (briefly) would form part of value of transaction. Customs duty is not subsumed in GST and as such it not a levy under GST. So custom duty is a tax other than GST. Hence will form part of value of transaction.

IGST would be charged in place of CVD and SAD. Thanks.

[Guest]

Sir, as you rightly said customs duty is not subsumed in GST. Let us take example , I am importing goods from mexico and customs duty is paid on that. When i pay IGST on my transaction value i shall include customs duty also. Whether this is tax on tax again whether or not under same statute. hope my question is clear. thank you

[Ganeshan Kalyani]

Sir, even today CVD and SAD is charged on Customs Duty. CVD and SAD since would be subsumed in GST it would be called by name IGST. In any case it is not be understood these taxes would then be elapsed. It would be there but their name is IGST and not CVD and SAD. Thanks.

[Guest]

sir, I understood what you have said, my main intention to ask this is because, the aim of GST is to avoid tax on tax, if then why again the same type of clause is introduced in new regime.thanks

[Ganeshan Kalyani]

Sir, even in the proposed GST all the taxes have not been subsumed. Thus there would be another amendment on which the houses shall be debating. However on the taxes been subsumed the rate shall be hiked on calculated basis.

Sir, Customs duty is levied to control imports and exports and in my view this duty shall be there for the purpose for which it is levied. Thanks.

I would welcome views of my collegue experts to enlighten the respectful querist. Thanks.

AI Summary

Inclusion of non-GST taxes in transaction value increases IGST liability by requiring customs duties to be added to taxable value. Taxes, duties, fees and charges levied under statutes other than the CGST/SGST/IGST Acts are included in the value of supply; customs duty not subsumed in GST must be added to transaction value when computing IGST, and CVD/SAD conceptually becomes part of IGST where subsumed, producing a layered incidence tied to duties retained for import regulation.