Bond Transfer

[Asked by Guest]

Suppose Mr.A imports the goods and while the goods are still lying in bonded warehouse Mr.A sells the goods to Mr.B so that the goods are cleared by Mr.B from warehouse...

Question arises that will Mr.B have to pay GST twice that is first to Mr.A and the other when he clears from customs warehouse...???

[KASTURI SETHI]

Any tax cannot be charged twice.

[Kishan Barai]

It would be considered to High Sea Sales, so no double GST would be chargeable, IGST in the form of Import duty has to be paid at the time filling Ex Bond - Bill of Entry

[Raghunandhaanan rvi]

Sir,

IGST not payable twice because of the following reasons:

A is bonding the cargo in customs warehouse without payment of any duty as customs act permits to do so.

B purchasing the goods from customs bonded warehouse as in-bond sale is permitted under customs act [Sec. 59(3)]

A issue in-bond sale invoice to B where A should not claim IGST because the goods are still in bonded warehouse and A is not filing bill of entry for home consumption

B is claiming the ownership of cargo and files bill of entry for clearance from bond and he is the person making payment of customs duty which includes IGST.

The definition of "Customs Area" in customs act has been amended to include warehouse as customs area in order to deposit the goods in the warehouse w/o payment of IGST. The extract of the relevant portion of taxation law 2017 is appended below :

The Customs Act, 1962 provides for removal of goods from a customs station to a warehouse without payment of duty. It is proposed to amend the said Act to include 'warehouse' in the definition of "customs area" to ensure that an importer would not be required to pay the proposed integrated goods and services tax at the time of removal of goods from a customs station to a warehouse. It is also proposed to amend the said Act to insert new provisions therein so as to provide for furnishing of information by specified persons in respect of import or export of goods, on the lines of the Income-tax Act, 1961, the Central Excise Act, 1944, Chapter V of the Finance Act, 1994 and the egislations referred to in paragraph 1.

B

[Himansu Sekhar]

Igst would be charged at the time of clearance from customs port.

AI Summary

IGST on bonded goods: payable on clearance by the buyer, not charged twice under in-bond sale rules
Where goods are deposited in a customs bonded warehouse and sold in an in-bond sale, the seller should not charge IGST because no bill of entry for home consumption has been filed; the buyer files the bill of entry to clear the goods from bond and pays the customs duty which includes IGST at the time of clearance.