2018 (10) TMI 709 - HC - Customs

Benefit of advance license - Denial of facility of exemption from payment of customs levy for the goods imported solely for the purpose of fulfilling export obligations - denied merely on the premise of the introduction of a new levy under the Goods and Service Tax with effect from 01.07.2017 - Held that - The imports which are the subject matter of the present writ petition were in fact made after the introduction of GST Regime. The petitioner is the beneficiary of an advance license issued on 17.07.2017. At that point of time, the exemption notifications (issued on 29.06.2017) were not in existence. The exemption of IGST, was not in force, on that date; the customs notification (of 29.06.2017) was amended only on 13.10.2017. This Court is of the opinion that since the benefit of exemption in fact existed at that point of time, the most appropriate course would be for the respondent authorities to verify whether as a matter of fact the petitioner in fact fulfilled the export obligations pursuant to the advance license of 18.07.2017 - petition disposed off.

Summary

Issues:
Refusal of customs levy exemption for goods imported for export obligations under Foreign Trade Policy 2015-20 post-GST implementation.

Analysis:
The petitioner's grievance was the denial of exemption from customs levy for goods imported to fulfill export obligations post-GST implementation. The petitioner had advance authorizations under the Foreign Trade Policy 2015-20. The petitioner argued that existing exemptions under custom notifications should not have been denied due to the introduction of GST from 01.07.2017. An interim order was issued on 11.10.2017, granting relief to exporters and directing the petitioner not to pay IGST for imported gold bars under the advance authorizations until the final decision. The respondent later extended exemption benefits to IGST under the IGST levy, not covered by the amended custom notifications of 29.06.2017.

The imports subject to the petition were made after the GST regime began, with the petitioner holding an advance license issued on 17.07.2017, predating the exemption notifications issued on 29.06.2017. The exemption of IGST was not in effect at the time of the license issuance, as the customs notification amending it was on 13.10.2017. The court opined that as the exemption existed when the petitioner obtained the license, authorities should verify if export obligations were fulfilled. If confirmed, no further action was required; if not, appropriate assessment under the law was necessary. The respondent was directed to complete verification and any subsequent actions within four months with proper notice and opportunity for the petitioner.

The judgment disposed of the writ petition under the stated terms, with the pending application also being resolved accordingly.