TaxTMI 
TaxTMI 
2025 (6) TMI 1234
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....d by the 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 the 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. M/s. West Pharmaceutical Packaging India Private Limited (hereinafter called as the "Applicant") is registered in the state of Telangana bearing GSTIN 36AAACW8510C1ZM. The applicant is engaged in the trading of "rubber stopper" products for pharmaceutical use which is imported through Free Trade Warehousing Zone unit located in Tamil Nadu. The applicant is seeking advance ruling on the question, "Whether the applicant is required to obtain registration under GST in the state of Tamil Nadu as per Section 22 of the CGST Act for the operations undertaken from the FTWZ unit?" 2. The App....
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....c) The service provider holds goods on behalf of the Applicant based on the instructions provided. Such goods are held in the warehouse till the Applicant identifies the end customer. d) The service provider undertakes repacking activities on the instructions of the Applicant. This includes relabeling and packaging of the goods sold. As the imported goods are stored in such bonded warehouse (FTWZ) and not cleared for home consumption, the Applicant states that they are not required to discharge customs duty till goods are cleared for home consumption. 3.4 The applicant, being registered in Telangana undertakes aforesaid activities through FTWZ unit situated in Tamil Nadu. The said operation is supervised by the Applicant from the state of Telangana and does not have any presence in the state of Tamil Nadu i.e., the applicant is not registered under GST in Tamil Nadu. Accordingly, goods are imported on a "Bill to-Ship-to" arrangement where the export invoice issued by overseas supplier is billed in the name of the Applicant and the goods are dispatched or shipped to the location of the FTWZ Unit for the purpose of import. The payment is made by the applicant to the su....
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....lopment Commissioner of SEZ. Accordingly, it could be inferred that the Applicant should not be required to get itself registered as a unit under the SEZ legislation in a situation where the Applicant has engaged a licensed FTWZ unit (through an service provider) to warehouse the goods under its license. The FTWZ unit would be responsible to comply with the SEZ licensing and compliance requirements. "It is clarified that FTWZ units can hold goods on behalf of the foreign supplier and buyer and DTA supplier and buyer as well, subject to fulfilment of provisions made in Rule 18 (5) of SEZ Rules, 2006." 4.5 An FTWZ unit is exempted from the levy of customs duty including Integrated tax ('IGST') on import of goods as per section 26(1)(a) of SEZ Act read with Rule 27 of SEZ rules 2007 and the same is continued under the GST regime. The relevant excerpt is provided below for reference- "Section 26(1) Subject to the provisions of sub-section (2), every developer and the entrepreneur shall be entitled to the following exemptions, drawbacks and concessions namely :- (a) Exemption from any duty of customs, under the Customs Act, 1962 or the Customs Tariff Act, 1....
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.... Entry for warehousing' as per the Customs Act. As the imported goods are stored in FTWZ unit and not cleared for home consumption, there is no levy of customs duty (import duty) in line with Section 26(1)(a) of SEZ Act. 4.9 Such view is further crystallized from the issuance of Notification No.64/2017-Customs dated 5th July 2017 which sought to provide specific exemption from IGST for SEZ units. Relevant excerpt from the said notification is provided below- "the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby exempts all goods imported by a unit or a developer in the Special Economic Zone for authorized operations, from the whole of the integrated tax leviable thereon under sub-section (7) of section 3 of the Customs Tariff Act, 1975 (51 of 1975) read with section 5 of the Integrated Goods and Service Tax Act, 2017 (13 of 2017)" 4.10 Further, Circular No. 3/1/2018-IGST dated 25th May 2018 was issued to clarify the applicability of IGST on goods supplied while being deposited in customs bonded warehouse. The said Circular stated that Integrated tax shall be levied and collected at the time of final clearance of the ....
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....Customs Act, 1962. Section 2(13) of Customs Act defines 'customs station' as below- "(13) "customs station" means any customs port, customs airport [international courier terminal, foreign post office] or land customs station;" From the above provision, it can be seen that a land customs station is covered under the definition of "customs station". Further as per Section 2 (11) of Customs Act, "customs area" means the area of a customs station [or a warehouse] and includes any area in which imported goods or export goods are ordinarily kept before clearance by Customs Authorities. 4.14 "J Matadee Free Trade zone" is a notified FTWZ as per Annexure to Public Notice 43/2015, from where the FTWZ service provider provides warehousing and other handling services to the Applicant. FTWZ being a special category of an SEZ, can be implied as a customs warehouse under provisions of Customs Act. From the conjoint reading of provisions of Schedule III of CGST Act and definition of warehoused goods in the Customs Act, the Applicant is of the view that sale of goods lying in the FTWZ warehouse to the customer would squarely get covered as one of the activities listed in S....
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....WZ, it may face challenge in adding the FTWZ location as an additional place of business. 4.17 In order to strengthen their contention, the applicant has placed reliance on the following rulings issued by the Advance Ruling Authorities, viz., i) Ruling of the Hon'ble Authority for Advance Ruling, Telangana in the case of AIE Fiber Resource and Trading (India) Private Ltd ii) Ruling of the Hon'ble Authority for Advance Ruling, Tamil Nadu in the case of Sadesa Commercial Offshore De Macau Ltd iii) Ruling of the Hon'ble Authority for Advance Ruling, Maharashtra in the case of Kamdhenua Agrochem Industries LLP iv) Ruling of the Hon'ble Authority for Advance Ruling, Maharashtra in the case of Gandhar Oil Refinery (India) Ltd v) Ruling of the Hon'ble Authority for Advance Ruling, Maharashtra in the case of AAREL Import Export Private Ltd vi) Ruling of the Hon'ble Authority for Advance Ruling, Maharashtra in the case of Sonkamal Enterprises Private Ltd vii) Ruling of the Hon'ble Authority for Advance Ruling, Karnataka in the case of Pine subsidiary industry viii) Ruling of the Hon'ble Authority for Advance Ruling, Karnataka in the case of....
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....osing copies of the documents called for. Under the additional submissions made, they stated that the relevance of the recent amendment of Schedule III issued as per the Finance Act, 2025, which seeks to bring in retrospective effect to exclude any supply of goods warehoused in a SEZ or FTWZ to any person before clearance for exports or the Domestic Tariff area from the levy of GST, was emphasised before the authorities at the time of personal hearing. Further, they had also explained the implications of Customs duty applicable as per Section 47 (2) of the Customs Act, 1962, at the time of filing Bill of Entry for home consumption. Since the Bill of Entry for Home Consumption is filed by the applicant on behalf of the customer at the time of clearance from FTWZ, the applicant initially pays the applicable customs duty on the basis of TR-6 challan generated by DHL and later recovers the same from the customer through commercial sales invoice along with the price of the goods. In this regard, as undertaken during the personal hearing, the furnished the documents, viz., Invoice raised by M/s. West Pharma Inc., United States for export of 'rubber stopper products, commercial invoice ra....
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....iness activity or presence in the State of Tamil Nadu, and that the said operation is supervised by the applicant from the State of Telangana. As per the "Schedule -II The Services" of the Logistic Services Agreement, the scope of Work is elucidated as below :- - Transportation from the port into the FTWZ - Storage - Handling of goods for shipments from the FTWZ to DTA (West Pharma as IOR) Outbound Customs Clearance (West Pharma IN as IoR) Further as per Point no. 4 "Charges" of Logistic Services Agreement, it is stated that in consideration of DLH performing the services, the applicant shall pay to DHL the charges set out in Schedule-3 of the agreement. The applicant in turn recovers the same from the end customer. 7.3 In order to answer the query raised by the applicant, the crucial aspect as to whether the transfer of title of the goods lying in the FTWZ warehouse before clearance for home consumption constitutes a 'Supply' or not is to be determined, before discussing the necessity or otherwise of the applicant getting registered within the state of Tamilnadu. Therefore, the legalities relating to the Customs Act, 1962, Special Economic Zones Ac....
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....dian client (applicant) would be mentioned. In this regard, a perusal of documents furnished by the applicant in this regard under their letter dated 24.04.2025, reveals the following :- (i) A Bill of Entry for warehousing into FTWZ is raised (captioned as Bill of Entry for SEZ Import Z Type), where the importer's name has been mentioned as 'M/s. West Pharmaceutical Packaging India Private Limited' and under the SEZ unit details, M/s. DHL Logistics Private Limited, J. Matadee Free Trade Zone, Mannur' has been mentioned. (ii) A commercial sale invoice is raised by the applicant, where the recipient's name is mentioned as 'M/s. Aspiro Pharma Limited'. (iii) A Bill of Entry for Home Consumption (Bill of Entry for DTA Clearance T Type) is raised where the importer's name is mentioned as 'M/s. Aspiro Pharma Limited', and under the SEZ unit details, M/s.DHL Logistics Private Limited, J. Matadee Free Trade Zone, Mannur' has been mentioned. 7.6 The SEZ link to Customs Act, is established under Section 53 of the SEZ Act, which runs as below, "53. Special Economic Zones to be ports, airports, inland container depots, land stations, etc., in certain case....
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.... goods in a customs bonded warehouse and thereafter, supplies such goods to another person who then files an ex-bond bill of entry for clearing the said goods from the customs bonded warehouse for home consumption. 4. It may be noted that as per sub-section (2) of section 7 of the Integrated Goods and Services Tax Act, 2017 (hereinafter referred to as the "IGST Act"), the supply of goods imported into the territory of India, till they cross the customs frontiers of India, is treated as a supply of goods in the course of inter-State trade or commerce. Further, the proviso to sub-section (1) of section 5 of the IGST Act provides that the integrated tax on goods imported into India would be levied and collected in accordance with the provisions of section 3 of the Customs Tariff Act, 1975 (hereinafter referred to as the "CTA"). Thus, in case of supply of the warehoused goods, the point of levy would be the point at which the duty is collected under section 12 of the Customs Act, 1962 (hereinafter referred to as the "Customs Act") which is at the time of clearance of such goods under section 68 of the Customs Act. 5. It may also be noted that sub-section (8A) has been....
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....ntaining provisions relating to 'Levy and collection of Tax', it does not contain the provisions relating to 'Scope of supply', 'time and value of supply', 'input tax credit', 'demand and recovery', etc. The provisions of Central Goods and Services Tax Act, 2017 applies mutatis mutandis in relation to integrated tax in respect of such provisions, as provided under Section 20 of the IGST Act, 2017. Therefore, with the amendment to Schedule III of the CGST Act, 2017 with effect from 01.02.2019, with regard to 'scope of supply', the integrated tax also stands impacted to that extent. 7.12 From the legal provisions referred above, it becomes clear that even before the amendment to Schedule III of the CGST Act, 2017, the legal position was that the supply of goods before their clearance from the warehouse would not be subject to the levy of Customs duty or integrated tax and that the same would be levied and collected only when the warehoused goods are cleared for home consumption from the customs bonded warehouse. It was made all the more conspicuous, post the amendment carried out through para 32 of the Central Goods and Services Tax (Amendment) Act, 2018 (No. 31 of 2018), whereby ....
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....n respect of the FTWZ/SEZ, being discussed in the instant case, as well. 7.14 Notwithstanding the above, in order to bring clarity to the issue in question, and to be more specific, the Government by way of clause 128 of the Finance Bill, 2025 (Bill No.14 of 2025) has proposed to insert a new clause (aa) in paragraph 8 of Schedule III of the CGST Act, which shall be retrospectively effective from the 1st day of July, 2017. The proposed insertion is to the effect that 'supply of goods warehoused in a Special Economic Zone or in a Free Trade Warehousing Zone to any person before clearance for exports or to the Domestic Tariff Area shall be treated neither as supply of goods nor as supply of services.'. The excerpts of the relevant clause in the Finance Bill, is reproduced as under for reference, i.e., "Clause 128 of the Bill seeks to insert a new clause (aa) in paragraph 8 of Schedule III of the Central Goods and Services Tax Act to specify that the supply of goods warehoused in a Special Economic Zone or in a Free Trade Warehousing Zone to any person before clearance for exports or to the Domestic Tariff Area shall be treated neither as supply of goods nor as supply of s....