IGST interest is it applicable during Re Import of Export goods

[Raja Palaniappan]

Dear Sirs

We have done an import for customer where in exports of garments 5 shipments valued approx 5cr, export done under LUT has been found quality defect at destination and due to Covid 19 and not possible travel for any repair, it is returned back. It is not sure of re export so filed as re import only. (not repair and return)

All benefits of export Drawback and Rosctl has been paid along with interest.

IGST 5% customer is ready to pay and will apply for ITC. However customs is asking for interest 18% on IGST applicable from date of export until return of goods. Importer is already under loss due to return, and the sale is incomplete. In that case is it mandatory to pay

IGST during import ?

Interest on IGST applicable ?

Kindly give your comments and reply sir.

AI Summary

Debate on IGST Interest Applicability for Re-Imported Goods Due to Defects: Section 13 Notification Highlights Exemptions A discussion on a forum addresses whether IGST interest is applicable during the re-import of exported goods due to quality defects. The goods, exported under LUT and returned due to COVID-19 travel restrictions, were re-imported without repair. The exporter has paid export benefits and interest, but customs demands 18% interest on IGST from the export date until the goods' return. Participants debate whether IGST is payable upon re-import, citing relevant notifications and court decisions. They conclude that IGST is typically payable unless specific exemptions apply, such as exports under Advance Authorization or EPCG, or if goods were exported for exhibitions.