Advance Authorization

[Kaustubh Karandikar]

Vide Notification No. RE 53 under Foreign Trade Policy (Ministry of Commerce), restriction of exemption on IGST for Import under Advance Authorization only if it is imported First Is removed.

1) Does this mean that there is exemption even if you Export first and Import later?

2) If that is correct, can we Export first paying IGST and claim refund of IGST paid and later Import under Advance Authorization without payment of IGST? Is this Permissible?

AI Summary

IGST exemption without pre import condition allowed, subject to bond and CA certificate if input tax credit was availed.
Removal of the pre import condition allows IGST and compensation cess exemption on imports under Advance Authorization (including specified deemed exports) even when imports follow export. The Advance Authorization remains subject to actual user and non transferability conditions. If the importer availed input tax credit for inputs used in exported goods, a bond to Customs and a Chartered Accountant certificate (within six months of clearance) are required to use imported materials in manufacture of taxable goods; payment of IGST and cess at clearance obviates the bond requirement. The amendment appears to operate prospectively, raising retrospective eligibility concerns.