Shipping Bill under Advance License

[Ritesh Dave]

Dear All,

We are DTA Unit and we have obtained Advance Authorization to purchase raw materials from the SEZ Unit. At the time of Import Raw Materials from the SEZ Unit against Advance Authorization, We do not pay IGST. After receipt of raw materials, we have manufacture finished goods and export to foreign country. At the time of filling of shipping bill under the Advance License, we have file the shipping bill under IGST Refund and not LUT.

Custom officer reject the shipping bill and inform us that shipping bill has to be file under the LUT and not IGST Refund as at the time of purchase raw materials from the SEZ Unit, you do not pay the IGST.

is this stand of custom officer is correct ?

Kindly inform with support of any circular, notification etc..

Regards,

Ritesh Dave

[Shilpi Jain]

Do let me know when the import was done.

This restriction is as per rule 96(10). In case you had only taken customs duty exemption and paid off IGST and Cess, you could have exported with payment of tax.

Now also you can pay the IGST and Cess and regularize your transaction. Ensure that the payment of the IGST and cess is done by re-assessment of the BoE and not merely by TR-6 so that the credit does not get denied.

[Shilpi Jain]

Also, have a look at Circular No. 16/2023-Cus dated 7th Jun 23 which is in the context of pre-import condition. This procedure you could also follow in case you are looking at paying IGST and cess on your imported inputs.

[KASTURI SETHI]

Agree with Madam Shilpi Jain. The querist cannot enjoy the benefits of both worlds i.e. double benefit.

AI Summary

IGST payment requirement: file exports under LUT if IGST not paid at import; regularise by paying IGST and cess. DTA unit imported inputs from an SEZ unit under Advance Authorization without paying IGST and later filed the shipping bill for IGST refund; customs rejected it, requiring filing under LUT since IGST was not paid. Advisers refer to rule 96(10) and advise regularising by paying IGST and cess via reassessment of the Bill of Entry (not only TR-6) and following the circular on the pre-import condition.