IGST CREDIT UNDER ZERO % EPCG SCHEME - 12

[Sanjay Patel]

Dear Sir,

We have imported machinery under Zero % Epcg scheme No. 12. - Exim notification no. 16 / 2015

We have not paid any duty , i.e Basic + social welfare + igst.

The B/E shows the Basic duty + IGST as CVD. But under GSTIN Details IGST shown as ZERO.

Our CHA inform us that we can avail the IGST. We want to confirm that we can take a credit of IGST or not.

Waiting for your reply.

Regards,

Sanjay Patel

[KASTURI SETHI]

IGST is exempted up to 31.3.2020 vide DGFT Notification No.57/2019 dated 20.3.19. How ITC can be taken ? Notification is appended below:-

Amendments to Foreign Trade Policy 2015-2020 - Extension of Integrated Goods and Service Tax (IGST) and Compensation Cess exemption under Advance Authorisation, EPCG and EOU scheme upto 31.03.2020. - 57/2015-20 - Foreign Trade Policy

[CSSANJAY MALHOTRA]

Dear Mr Patel,

You can’t avail IGST credit as you have not paid the same during Import clearance. Had you paid off the same in Cash and are supplying taxable goods/services, you would have been eligible for ITC.

AI Summary

IGST credit under EPCG scheme unavailable where IGST exemption applied and tax was not paid at import. Import under the EPCG scheme benefited from an IGST exemption so IGST was not paid at import clearance; consequently the importer cannot claim IGST input tax credit. If IGST had been paid in cash during import and the importer made taxable supplies, ITC would have been available, but the exemption and non-payment at importation preclude claiming credit.