2020 (3) TMI 1044 - AAR - GST

CENVAT Credit of IGST - import of goods through the port situated in different state - Place of supply - issuance of tax invoice with IGST to the customer - need to obtain registration in the state where the port of clearance is located. Whether the applicant can take credit of IGST paid on import of goods? - HELD THAT - The applicant being the importer of storage solutions and vertical storage solutions (machines) from Germany is liable to pay the integrated tax on goods imported into India in accordance with the provisions of section 3 of the Customs Tariff Act, 1975, on the value as determined under the aforesaid Act at the point when duties of customs are levied on the said goods under section 12 of the Customs Act, 1962, in terms of proviso to the subsection (1) of section 5 of the IGST Act, 2017 - In view of the said provisions applicant is liable to pay IGST on the value of the goods imported into India on reverse charge basis. Whether applicant can issue tax invoice with IGST to the customer? - HELD THAT - The place of supply in case of import of goods, is the location of the importer in terms of section 11(a) of the IGST Act 2017 and in the case of applicant the location of the importer is the state of Karnataka where the applicant has obtain the GST registration. Therefore, the applicant though import the goods to the port nearest to the location of the recipient, said imported goods are deemed to have been supplied to the location of the importer i.e., Karnataka and then further supplied to customer. Hence imported goods supplied directly from the port of import to the customer located in other states or Union territories other than state of Karnataka, such transaction shall be treated as a supply of goods in the course of inter-State trade or commerce in terms of section 7(1) of the IGST Act, 2017 and is liable to issue IGST tax invoice in terms of section 20 of the IGST Act 2017 read with section 31 of the CGST Act 2017. Whether applicant needs to obtain registration in the state where the port of clearance is located? - HELD THAT - Since the applicant already registered under GST Act, no provisions under the CGST or SGST or IGST Act 2017 mandates any person to obtain the registration again in the place of port where applicant obtain the custom clearance for further supply of goods. Hence, there is no need for the applicant to obtain the separate registration in the state where port of clearance located, if he does not have an establishment in that State and effecting supplies from that location.

Summary

Issues:
1. Credit of IGST paid on import of goods
2. Issuance of tax invoice with IGST to the customer
3. Requirement of registration in the state where the port of clearance is located

Analysis:

Issue 1: Credit of IGST paid on import of goods
The applicant, an importer of storage solutions, sought clarification on whether they can claim credit of IGST paid on imported goods. The Authority examined the provisions of the IGST Act and the CGST Act, determining that the applicant, who imports goods from Germany, is liable to pay IGST on the imported goods. As per Section 20 of the IGST Act 2017 and Section 16 of the CGST Act 2017, the applicant can avail credit of IGST paid on imported goods if those goods are used in the course or furtherance of their business, which was confirmed as the case for the applicant.

Issue 2: Issuance of tax invoice with IGST to the customer
The applicant inquired whether they can issue a tax invoice with IGST to the customer. The Authority clarified that as per the IGST Act 2017 and the CGST Act 2017, when goods are directly dispatched from the port of import to the customer's location, the transaction is treated as an interstate supply. Therefore, the applicant can issue a tax invoice with IGST to the customer for such interstate transactions, with invoicing done from the registered place of business.

Issue 3: Requirement of registration in the state where the port of clearance is located
The applicant questioned whether they need to obtain registration in the state where the port of clearance is located. The Authority determined that since the applicant is already registered under the GST Act in Karnataka and uses this registration for import and payment of IGST, there is no statutory requirement for the applicant to obtain separate registration in the state where the port of clearance is located, provided they do not have an establishment in that state and are not making supplies from that location.

In conclusion, the Authority ruled that the applicant is eligible to claim credit of IGST paid on imported goods, can issue tax invoices with IGST for interstate transactions, and is not required to obtain registration in the state where the port of clearance is located if no supplies are made from that state.