Dear Experts
Please guide. X imports goods in India and files Bill of Entry for Home Consumption; the goods are lying in Customs Warehouse pending payment of duty. Before payment of duty, X sells goods to Y; however after the sales X pays the Customs Duty and gets OOC. Now the questions are:
1. Whether sales from X to Y will be liable to GST?
2. Is there any legal prohibition under Customs Act or GST Act on sale of goods imported pending clearance?
3. If the import is completed only after payment of duty, then this sales from X to Y would be domestic sales or high sea sale?
GST on sale of imported goods in customs warehouse turns on clearance status and pre-clearance transfer characterization. GST liability is questioned on a transfer of imported goods while they remain in a customs warehouse and before payment of customs duty and issuance of out-of-charge clearance. The issue is whether a sale by the importer to a third party during the pendency of customs clearance is treated as a taxable domestic sale, or whether it retains the character of a high sea sale or other pre-clearance transaction. The enquiry also covers whether the Customs Act or GST law contains any prohibition on sale of goods imported into India but not yet cleared for home consumption. (AI Summary)
TaxTMI 
TaxTMI 
