AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2024 (8) TMI 695
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.... applicant by fraud or suppression of material facts or misrepresentation of facts, shall render such ruling to be void ab initio in accordance with Section 104 of the Act. 5. The provisions of both the Central Goods and Services Tax Act and the Tamil Nadu Goods and Services Tax Act (herein referred to as an Act) are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the Central Goods and Services Tax Act would also mean a reference to the same provisions under the Tamil Nadu Goods and Services Tax Act. 1. At the outset, we would like to make it clear that the provisions of both the Central Goods and Services Tax Act and the Tamil Nadu Goods and Services Tax Act are in pari materia and have the same provisions in like matters and differ from each other only on few specific provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the Central Goods and Services Tax Act, 2017 would also mean a reference to the same provisions under the Tamil Nadu Goods and Services Tax Act, 2017. 2. M/s Panasonic Life Solutions India Private Limited (hereinafte....
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....egistration for the purposes of import of goods into India. The BOE filed by KILPL clearly mentions the name of the Applicant as the client on behalf of whom the goods are being imported by KILPL. • As per the arrangement with the Applicant, the FTWZ unit (viz. KILPL) merely clears and warehouses the goods imported and in consideration, the FTWZ unit collects warehousing charges from the Applicant. • To import goods into India, the Applicant places an order to the foreign suppliers. Based on the purchase order, overseas entities export goods to Panasonic India by mentioning name of consignee as M/s. KILPL (i.e. LSP), FTWZ unit on A/C of the Applicant with shipping address of LSP in all the export documents including export invoices. • Prior to arrival of goods in the customs port, the Applicant would intimate KILPL in Chennai and provides copy of the purchase order and other documents for clearance of goods from the port and storage of the same in FTWZ unit. • On arrival of goods, the FTWZ unit of KILPL files BOE in quintuplicate (5 copies) with the SEZ authorities, in their name i.e. M/s. KILPL, on account of M/s. Panasonic India....
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....ts of the case the applicant has filed an application seeking for advance ruling on the following queries. Query 1 - In the facts and circumstances of the case, whether the transfer of title of goods stored in FTWZ Unit by the Applicant to its customers in Domestic Tariff Area (DTA) or multiple transfers within the FTWZ followed by a subsequent removal from FTWZ Unit would result in bonded warehouse transaction covered under para 8 (a) of Schedule HI of the CGST Act or Tamil Nadu GST and Service Act, 2017 (hereinafter referred to as 'the TNGST Acti) and the rules made there under? Query 2 - If answer of the above query is No, whether Integrated Goods and Services Tax (TGST) is payable by the Applicant on goods stored in FTWZ unit and supplied to its customers in DTA unit, in addition to the customs duty payable [i.e. Basic Customs Duty (BCD) + IGST] by the customer in DTA on removal of goods from the FTWZ unit in accordance with Section 30 of Special Economic Zone ('SEZ' Act, 2005 and read with the Customs laws? Query 3 - If the supply of goods lying in FTWZ unit is not covered under para 8 (a) of Schedule HI of the CGST Act, whether any reversal of input....
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.... as per the Customs Act, 'warehoused goods' means goods deposited in a warehouse. Further, in terms of section 2 (43) and 2 (44) of Customs Act, "warehouse" means a public warehouse licensed under section 57 or a private warehouse licensed under section 58 or a special warehouse licensed under section 58A. the relevant provisions of the Customs Act, reads as below:- 57. Licensing of public warehouses -The Principal Commissioner of Customs or Commissioner of Customs may, subject to such conditions as may be prescribed, license a public warehouse wherein dutiable goods may be deposited. 58. Licensing of private warehouses,- The Principal Commissioner of Customs or Commissioner of Customs may, subject to such conditions as may be prescribed, license a private warehouse wherein dutiable goods imported by or on behalf of the licensee may be deposited. 58A. Licensing of special warehouses,- (1) The Principal Commissioner of Customs or Commissioner of Customs may, subject to such, conditions as may be prescribed, license a special warehouse wherein dutiable goods may be deposited and such warehouse shall be caused to be locked by the proper officer and no person....
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....or FTWZ. Accordingly, FTWZ should be classified as a SEZ for authorized operations rather a "warehouse'. 6.1.6 The applicant has stated that by virtue of Instruction no. 60 dated 6 July 2010, the FTWZ unit is allowed to store goods on behalf of the DTA supplier and buyer and the same will be considered as an authorized operations as per Rule 18 (5) of the SEZ Rules. They are also of the view that even though the day-to-day activities like warehousing and clearing of goods for home consumption on payment of applicable customs duties are supervised/monitored by Customs officials posted in the FTWZ in accordance with SEZ Act 2005, read with Customs Act, the approval / license/administrative control for FTWZ are fully governed under the provisions of SEZ Act. Therefore, they have submitted that irrespective of the administrative framework to monitor the functioning, it is clear that FTWZ unit is a SEZ unit. 6.1.7 Taking inference from all the above arguments, the applicant is of the view that FTWZ unit can neither be termed as 'warehouse' nor goods stored in a FTWZ unit said to be 'warehoused goods' as defined under the Customs Act. In this regard, they have placed reliance on th....
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....uty in accordance with the provision of Section 3 of the Customs Tariff Act. 6.2.3 The applicant further stated that on perusal of definitions of 'imports' given in the IGST Act and the Customs Act vis-a-vis definition of 'imports' as per the SEZ Act, it can be inferred that bringing of goods from an SEZ to the DTA is not a Import'. Therefore, technically no Customs duty should be applicable on such removal. In respect of the fact that customs duty is levied only when goods cross frontiers of India and not when goods land into India, there are plethora of judgements. Some of them are discussed below: • In the case of Kiran Spinning Mills vs Collector of Customs on 5 August, 1999 (1999 (113) ELT 753 SC), it was held that the taxable event occurs when the Customs barrier is crossed. In the case of goods which are in the warehouse, the Customs barriers would be crossed when they are sought to be taken out of the Customs and brought to the mass of goods in the country. • In the case of State Trading Corporation of India Ltd. Vs State of Tamil Nadu [2003] 129 STC 294], it was held that sale of goods shall be treated as sale in the course of imports if the sa....
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....Z Act very well clarifies the same by overriding anything contrary written under the GST law. 6.2.7 As discussed above, by virtue of Section 30 of the SEZ Act read with Section 5 (1) of the IGST Act read and Section 3 of the Customs Tariff Act, supply of goods from SEZ to DTA shall be subject to customs duty as applicable on import of goods. However, Section 7 (5) of the IGST Act, supply of goods or service by a SEZ unit shall be treated as inter-state supply. To such extent, one can argue that there is an inconsistency between GST provision and SEZ provisions. Therefore, by virtue of Section 51 of the SEZ Act, the SEZ law should prevail over the GST Law and therefore, IGST on supply of goods from SEZ/FTWZ to DTA should be discharged as applicable on import of goods, and there cannot be tax levy in terms of Section 7 (5) of the IGST Act. 6.2.8 Further, the applicant from drawing reference to the paragraph 8 (b) of the Schedule III of the CGST Act, would like to reiterate that on transfer of title of goods by Panasonic India, goods shall be either cleared from the FTWZ unit by the customer or further transfer of title can happen while goods are lying in FTWZ. The applicant has....
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.... the time of clearance of such goods under section 68 of the Customs Act. 6. It is therefore, clarified that integrated tax shall be levied and collected at the time of final clearance of the warehoused goods for home consumption ie., at the time of filing the ex-bond bill of entry and the value addition accruing at each stage of supply shall form part of the value on which the integrated tax would be payable at the time of clearance of the warehoused goods for home consumption. In other words, the supply of goods before their clearance from the warehouse would not be subject to the levy of integrated tax and the same would be levied and collected only when the warehoused goods are cleared for home consumption from the customs bonded warehouse." 6.2.11 With the above analysis, the applicant has submitted that there shall not be any additional IGST liability at the hands of Panasonic India on account of transfer of title of goods lying in the FTWZ unit since such supply qualifies as supply in the course of import. In this regard, the applicant placed reliance on following rulings by Authority of Advance Ruling in the State of Tamil Nadu:- i. M/s. SADES A COMMERC....
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....ntervailing measure to levy tax as is leviable under the IGST Act on a like article on its supply in India and submitted that where the transaction of supply of goods is subject to Customs duty under the Customs Act there cannot be any additional taxable event in terms of Section 7 (5) of the IGST Act Moreover, levying of IGST twice in such a situation would completely defeat the purpose of introduction of GST and is completely unwarranted and in this regard, the applicant placed reliance on the judgement of the Hon'ble Supreme Court in the case of Union of India & Ann Vs M/s Mohit Minerals Pvt. Ltd-[Civil Appeal No. 1390 of 2022) which has upheld the judgement of Hon'ble Gujarat High Court wherein it was held that to the extent value of supply of a service, which has already been included by the legislation as a tax on the import of goods, separate tax on said supply of services cannot be allowed. The High Court in the impugned judgment has observed that:- "What has led to the present day problems in the implementation of the GST: 132. The GST is implemented by subsuming various indirect taxes. The difficulty which is being experienced today in proper implementat....
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....vices/Capital goods is required at the hands of the Applicant in terms of recent amended Section 17 (3) of the CGST Act? 6.3.1 In terms of Section 17(2) of the CGST Act, where the goods or services or both are used by the registered person partly for effecting taxable supplies including zero-rated supplies and partly for effecting exempt supplies, the amount of credit shall be restricted to so much of the input tax as is attributable to the said taxable supplies including zero-rated supplies. Further, Section 2 (47) of the CGST Act defines 'exempt supply' as 'supply of any goods or services or both which attracts nil rate of tax or which may be wholly exempt from tax under section 11, or under section 6 of the Integrated Goods and Services Tax Act, and includes non-taxable supply. Section 2 (78) of the CGST Act defines non-Taxable supply' as fa supply of goods or services or both which is not leviable to tax under this Act or under the Integrated Goods and Services Tax Act'. 6.3.2 Furthermore, in terms of amended Section 17 (3), value of exempt supply" shall not include the value of activities or transactions specified in Schedule III, except, inter-alia, the value of such ac....
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.... applicant submitted the following documents in support of their contentions, viz.,- (i) Agreement made on 25^th Oct, 2017 with M/s. Kerry Indev Logistics Private Limited for storage and warehousing services along with related Annexures to the agreement. (ii) Addendum to Free Trade Zone Warehousing Services agreement effective from 25^th Oct, 2021 to 24^th Jan, 2022. (iii) Addendum to Free Trade Zone Warehousing Services agreement dated 25^th Oct, 2017 effective from 25th Jan, 2022 to 24th Jan, 2023. (iv) Addendum to Free Trade Zone Warehousing Services agreement effective from 25^th Jan, 2023 to 24^th Jan, 2025. (v) Renewal of Free Trade Zone Warehousing Services agreement on 24^th October, 2018 with M/s. Kerry Indev Logistics Private Limited. (vi) Renewal of Free Trade Zone Warehousing Services agreement on 10^th September, 2019 with M/s, Kerry Indev Logistics Private Limited. (vii) Letter of approval in Lr. No. 8/5/2012/J. Matadee/SEZ dated 06-08-2012, issued by the Development Commissioner, MEPZ to M/s. Kery Indev Logistics Private Limited for the service activity of "Warehousing" valid for a period of one year. ....
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....eement with M/s. Kerry Indev Logistics (P) Ltd., a logistics service provider for clearance / handling of goods from Customs and for storage of imported goods in the warehousing unit of the logistics service provider situated in a Free Trade Warehousing Zone (FTWZ) at Chennai, India. Upon finalization of the customer, the applicant would transfer the title of goods to the customer. The goods are then either cleared by such customer from FTWZ unit, or, are transferred further without clearing the same. 11.2 The AR reiterated the submissions made originally by the applicant along with the application for advance ruling filed by them. The AR also discussed various case laws, rulings in support of their defence, but reiterated that FTWZ are to be considered as customs ports and not as warehouses, as per the extant legal provisions. 11.3 When the members enquired as to whether the imported goods are moved to any other warehouse or, whether the applicant transfers only the title of goods to customer, the AR explained that the applicant transfers only the title of goods to customer, and it is for the customer to make further transfers, or to clear the same in DTA. 11.4 In this re....
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....customs frontiers of India" means the limits of a customs area as defined in section 2 of the Customs Act, 1962. • Further, as per Section 2 (11) of Customs Act read with Section 2 (12) and 2 (13) of Customs Act, customs area would include any port appointed under Section 7 (a) of Customs Act. Moreover, in terms of Section 53 (2) of SEZ Act, SEZ (including FTWZ) is deemed to be considered as port under Section 7 of Customs Act. • From the above, it becomes clear that FTWZs are deemed to be considered as ports under Section 7 of the Customs Act and thereby, the same should be treated as customs frontiers of India/ customs area. • Further, by virtue of Section 30 of the SEZ Act, removal of goods from the SEZ/FTWZ unit has been subjected to Customs duty (including IGST) where applicable on such goods when imported. • Moreover, in terms of proviso to Section 5 (1), goods imported to India are subject to Customs duty in accordance with the provision of Section 3 of the Customs Tariff Act. • On conjoint reading of above provisions, it is established that removal of goods from SEZ to DTA shall be treated as imports at the ha....
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...., irrespective of who has filed the Bill of Entry. Since supplies from SEZ to DTA is treated as import of goods due to the aforesaid provisions, the said transaction shall attract the trappings of the proviso to Section 5 (1) of the IGST Act, 2017. The said tax shall be paid by the DTA under reverse charge as import of goods and hence find a mention under this clause." The applicant in this regard, has enclosed Copies of GST return instructions, CBIC FAQ, ICAI guidance note and copy of notifications in respect of amendment in Section 17 (3) of CGST Act and the connected Rule amendment in Rule 43 of CGST Rules. 13.3 Declaration with respect to enquiries under the Customs law - The applicant has also confirmed that there is no enquiry initiated or observation raised by the Customs/SEZ authorities on the Company with respect to transactions in question. 14. DISCUSSION AND FINDINGS; 14.1 We have carefully considered the submissions made by the Applicant in their application, submissions made during the personal hearing, and the comments furnished by the jurisdictional tax officers. 14.2 From the submissions made at the time of filing the application, it is seen that the ....
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....ed at J Matadee Free Trade Zone, Mannur Village, Sriperumbudur Taluk, Kancheepuram Dist - 602105 for providing the service as required by the applicant such as, storage space of 50 pallets or as required, store the products delivered at the facility, re-deliver the products from FTWZ as directed by the applicant etc. As per the agreement, KILPL is engaged by the applicant for all purpose including the provision of services of clearance of goods from Customs (CHA Services), storage and warehousing services at FTWZ, clearing and forwarding services within the FTWZ or from FTWZ to DTA, transportation and other ancillary services as required by the applicant from time to time. 14.4 In order to answer the queries raised by the applicant, the following definitions on some of the nomenclature as contained in the statute needs to be analysed and understood as defined in Customs Act, 1962, Special Economic Zones Act, 2005 (SEZ Act in short) and the GST provisions. It is seen that as per Section 2 (n) of the Special Economic Zones Act, 2005 (SEZ Act in short), "(n) "Free Trade and Warehousing Zone" means a Special Economic Zone wherein mainly trading and warehousing and other act....
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.... "53. Special Economic Zones to be ports, airports, inland container depots, land stations, etc", in certain cases.- "A Special Economic Zone shall, on and from the appointed day, be deemed to be a territory outside the customs territory of India for the purposes of undertaking the authorised operations. (2) A Special Economic Zone shall, with effect from such date as the Central Government may notify, be deemed to be a port, airport, inland container depot, land station and land customs stations, as the case may be, under section 7 of the Customs Act 1962 (52 of 1962)." From the above, it becomes clear that Special Economic Zones are deemed to be considered as ports, airports, inland container depots, land stations, outside the Customs territory of India, under Section 7 of the Customs Act, 1962, which deals with the appointment of ports, airports, etc. Hence, it is a deemed territory outside the Customs territory of India. 14.6 Further, as per Section 51 of the SEZ Act, the provisions of this Act, shall have an overriding effect over any other law, which is reproduced below "51. Act to have overriding effect,-The provisions of this Act shall have ....
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.... of such goods under section 68 of the Customs Act. 5. It may also be noted that sub-section (8A) has been inserted in section 3 of the CTA vide section 102 of the Finance Act, 2018, with effect from 31st March, 2018, so as to provide that the valuation for the purpose of levy of integrated tax on warehoused imported goods at the time of clearance for home consumption would be either the transaction value or the value as per sub-section (8) of section 3 of the CTA (i.e. valuation done at the time of filing the into-bond bill of entry), whichever is higher. 6. It is therefore, clarified that integrated tax shall be levied and collected at the time of final clearance of the warehoused goods for home consumption i.e., at the time of filing the ex-bond bill of entry and the value addition accruing at each stage of supply shall form part of the value on which the integrated tax would be payable at the time of clearance of the warehoused goods for home consumption. In other words, the supply of goods before their clearance from the warehouse would not be subject to the levy of integrated tax and the same would be levied and collected only when the warehoused goods are c....
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....endment) Act, 2018 (No.31 of 2018), whereby clauses 7 and 8 were added to Schedule III of the CGST Act, 2017, along with Explanation 2, as follows:- 32. In Schedule III of the principal Act, - (i) after paragraph 6, the following paragraphs shall be inserted, namely:-- "7. Supply of goods from a place in the non-taxable territory to another place in the non-taxable territory without such goods entering into India. 8. (a) Supply of warehoused goods to any person before clearance for home consumption; (b) Supply of goods by the consignee to any other person, by endorsement of documents of title to the goods, after the goods have been dispatched from the port of origin located outside India but before clearance for home consumption."; (ii) The Explanation shall be numbered as Explanation 1 and after Explanation 1 as so numbered, the following Explanations shall be inserted, namely:- "Explanation 2.--For the purposes of this paragraph, the expression "warehoused goods" shall have the same meaning as assigned to it in the Customs Act, 1962." In this regard, it may be seen that though the terms 'warehouse' and 'warehoused ....
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....tored in the FTWZ unit on behalf of the applicant. However, the tide of the goods stored in FTWZ unit would remain with the applicant during the storage. • During the period of warehousing, no manufacture or processing activity are carried out on the goods and the same would, be sold from FTWZ to the customers across India. • On finalisation of customers, applicant would raise a tax invoice on DTA customer in foreign currency. • For supply to overseas entity, goods are cleared without payment of tax under Letter of Undertaking' or bond. The customer either clears the goods from FTWZ or shall make further transfer of such goods to other customers. • For every transfer of title of goods, there may or may not be physical movement of goods. If there is no physical movement of goods post transfer of title, the customer makes suitable arrangement with the LSP or another FTWZ to store the goods. • The final customer files the Bill of Entry and clears the goods from FTWZ by making the payment of applicable Customs duty including IGST duly computed on the value under Customs provision and under Section 30 of SEZ Act, 2005. ....
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....plicant are reported to have been deposited and warehoused in FTWZ unit for further modes of transfer as stated above. As far as the activities relating to 'transfer of title of goods by the applicant to customers in DTA', and multiple transfers within the FTWZ' are concerned, as discussed in detail above, we are of the opinion that both these activities get squarely covered under para 8 (a) of Schedule-Ill of the CGST Act, 2017. In respect of the activity relating to 'followed by a subsequent removal from FTWZ unit, we observe that the same relates to the customer in whose name the title of goods has been transferred, as it is connected through the phrase "followed by a" to the other two main queries referred above. In this regard, it is to be stated that when the removal of goods is made by a customer in DTA from FTWZ, the same can be made only on payment of applicable duties of Customs including BCD and IGST by the DTA unit concerned, in terms of Section 30 of Special Economic Zone (SEZ) Act, 2005. However, since the said activity does not concern the applicant, the same need not be considered for answering in terms of Section 95 of the CGST Act, 2017. Accordingly, we hold that ....