CUSTOMS PRIVATE BONDED WAREHOUSE

[RAMAKRISHNA M]

Is IGST is applicable at the time of importing of Machinery spares parts @ Customs Private Bonded Warehouse ?

[RAMESH PRAJAPATI]

Import is treated as interstate transaction under GST. So when you get material cleared from customs bonded warehouse, you will have to pay IGST with BCD and other duties, if any.

[RAMAKRISHNA M]

Dear Ramesh Prajapathi,

This material importing and we will keep in Customs Private Bonded Warehouse.

From this Warehouse sales will happen and during sale time GST will be applicable as per norms

My question is during the time of Importing and moving to Customs Private Bonded Warehouse, it is required to pay IGST

regards,

Ramakrishna.M

[Rajagopalan Ranganathan]

Sir,

Before selling the imported goods, first you have to clear the imported goods on payment of applicable duties. You have to pay IGST on imported goods since it will be treated as inter-state supply. You can take ITC of IGST paid and utilize the same for payment of IGST, CGST, SGST in that order when you sell the imported goods in local market.

[RAMAKRISHNA M]

Dear Mr.Rajagopalan,

Thanks for revert.

You had given process that material is moving out of Customs Private Bonded Warehouse and IGST / CGST / SGST will be applicable as per delivery locations of Inter & Intra state movements. ITC will be taken by Purchaser and he will be utilised accordingly.

but while importing and moving to our Customs bonded Warehouse, is it required to remit IGST for imported materials is my question.

regards,

Ramakrishna - 9243199867

[RAMESH PRAJAPATI]

Duty and Tax is required to be paid when material moves out from customs bonded warehouse. Warehousing Bill of Entry is filed without payment of duties. Customs fundamentals are not changed in GST regime.

[Rajagopalan Ranganathan]

Sir,

The existing procedure under Customs Act is not affected by introduction of GST. Prior to 1.7.2017 When imported goods are warehoused without payment of duty have you CVD or SAD. The answer is no since whatever duty payable will be paid only when the imported goods are finally cleared on payment of duties. Therefore while warehousing the imported goods you need not pay IGST.

Moreover as per Section 7 (2) of IGST Act, 2017 "Supply of goods imported into the territory of India, till they cross the customs frontiers of India, shall be treated to be a supply of goods in the course of inter-State trade or commerce. Therefore it can be said that the imported goods have crossed the customs frontiers of India only when they are cleared from the warehouse on payment of duty.

[Himansu Sekhar]

I support the view of Ranganathan sir.

AI Summary

IGST on imported goods is payable on removal from bonded warehouse, not at initial warehousing importation.
Imported goods warehoused in a customs private bonded warehouse are not required to pay IGST at the time of import; a warehousing bill of entry is filed without duty payment. IGST and other duties become payable when the goods are cleared from the warehouse for home consumption, since the goods are treated as having crossed the customs frontier only upon such clearance. IGST paid on clearance can be taken as input tax credit and utilized according to normal GST rules when the goods are sold domestically.