Availment of ITC of differential IGST demanded by Custom on import of goods

[NiteeshChandra Shukla]

Sir,

Please advise that in case of import of goods IGST has been paid at 18% erroneously instead of 28% due to wrong classification of goods and it was even cleared by the Custom Department. Now the Custom department has issued SCN to pay the differential IGST i.e 10% (28%-18%), whether ITC of such IGST will be available?

[KASTURI SETHI]

If SCN has been issued invoking the elements of suppression of facts, fraud etc. ITC will not be admissible as such credit will be hit by Section 17(5)(1)(i) of CGST Act, 2017. If SCN has been issued without alleging suppression of fact, fraud etc.(i.e. without mala fide intention), ITC will be available. I have not seen the SCN but it appears to me suppression of facts, fraud etc. is not present in this case.

[NiteeshChandra Shukla]

Sir,

The language mentioned therein is: After introduction of Finance Act, 2011, the onus to make true and correct declaration in all aspects like classification, valuation, including calculation of duty & claim of benefit is on the importer; but in the instant case the duty amount has not been paid correctly bu you due to availment of wrong classification. Therefore, in terms of provisions of the Customs Act, 1962, you are advised to pay the above mentioned account.

[Vishal Garge]

Dear All,

if general notice received from custom to pay differencial IGST on material imported in 17-18 , still can we avail ITC on differencial IGST payment?

AI Summary

ITC on Differential IGST Denied if SCN Alleges Fraud; Importers Must Ensure Accurate Declarations Under Customs Act. A query was raised about the eligibility of Input Tax Credit (ITC) on the differential Integrated Goods and Services Tax (IGST) demanded by customs due to an incorrect classification of imported goods, resulting in a lower IGST payment. A response indicated that if the Show Cause Notice (SCN) alleges suppression of facts or fraud, ITC is not admissible under Section 17(5)(1)(i) of the CGST Act, 2017. However, if the SCN does not allege such misconduct, ITC may be available. Another response highlighted the importer's responsibility for accurate declarations, as per the Customs Act, 1962.