Rule 96(10) of CGST Rules

[Kaustubh Karandikar]

XYZ imported goods against advance authorization without payment of import duty and IGST. Part of these goods sold by XYZ to PQR under a Tax Invoice by charging GST. PQR claimed ITC of the GST charged by XYZ. PQR exported these goods on payment of IGST under claim for refund. Is it allowed as per Rule 96(10) of CGST Rules, 2017?

[Shilpi Jain]

PQR has not claimed any duty benefit. Hence, restriction of R 96(10) not applicable.

However, here XYZ will have to pay the duty benefit claimed on import as the goods are cleared in DTA.

[Kaustubh Karandikar]

Thanks shilpi ji for your kind advice.

AI Summary

XYZ must repay import duty benefits; PQR's tax actions allowed under Rule 96(10) of CGST Rules, 2017. XYZ imported goods without paying import duty and IGST under advance authorization and sold part of these goods to PQR, charging GST. PQR claimed Input Tax Credit (ITC) on the GST charged and exported the goods, paying IGST and claiming a refund. According to the discussion, PQR's actions are permissible under Rule 96(10) of the CGST Rules, 2017, as they did not claim any duty benefits. However, XYZ must pay the duty benefits claimed during import since the goods were cleared in the Domestic Tariff Area (DTA).