Goods were imported from China and supplied to a customer in India who in turn supplied it to a government department. But later such goods were found defective and rejected by the department and returned to the ultimate importer. Custom duties & IGST was duly paid.
Upon discussion with the Chinese supplier, they agreed with the defects and waived the consideration without return of such goods. Now, goods are lying with the importer which will be sold as scrap later.
Now, my question is whether consideration not paid/payable to the Chinese supplier will result in any kind of legal default or comolication under GST, FEMA, Customs, etc.?
Chinese Goods Rejected Due to Defects; Legal Issues Discussed on GST, FEMA, Customs, and CGST Act Section 17(5). Imported goods from China were found defective and rejected by an Indian government department. The Chinese supplier acknowledged the defects and waived the payment, allowing the goods to remain with the importer, who plans to sell them as scrap. The discussion centers on potential legal issues regarding GST, FEMA, and customs. It was advised to check the agreement terms and inform the bank about the situation for FEMA compliance. GST issues are unlikely, but an intimation to customs with documentation is suggested. Concerns about IGST and implications under Section 17(5) of the CGST Act were also discussed. (AI Summary)
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