TaxTMI 
TaxTMI 
XYZ imported goods and paid the IGST @ 12% but “STRICTLY UNDER PROTEST” since in their view as per the GST Tariff the rate applicable is IGST @ 5%. The IGST of 12% so paid on imports, they claimed full input tax credit of the same. However, while re – selling these goods in the domestic market i.e., trading activity, they charged GST @ 5% in the Tax Invoice which according to them is the correct GST rate. Will this create any problem for XYZ?
GST paid under protest on imports
23 Dec 2020 
6 Replies 
7331 Views Asked by
Payment under protest may affect input tax credit availability and trigger differential GST liabilities and compliance risk.
Importer paid higher IGST on importation "under protest," claimed full input tax credit, and sold the goods charging a lower GST rate. The GST law lacks an explicit payment under protest mechanism, creating potential departmental challenge to ITC, and exposure to differential tax, interest and penalty. Respondents note Customs practice may allow protest payments on import, cite a High Court decision and Section 174 as supportive, and suggest seeking refunds under an inverted duty structure-subject to pre audit-while maintaining detailed records of the protest. (AI Summary)
Importer paid higher IGST on importation "under protest," claimed full input tax credit, and sold the goods charging a lower GST rate. The GST law lacks an explicit payment under protest mechanism, creating potential departmental challenge to ITC, and exposure to differential tax, interest and penalty. Respondents note Customs practice may allow protest payments on import, cite a High Court decision and Section 174 as supportive, and suggest seeking refunds under an inverted duty structure-subject to pre audit-while maintaining detailed records of the protest. (AI Summary)