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TMI BlogSubject: Applicability of IGST / GST on goods transferred / sold while being deposited in a warehouse. -reg.X X X X Extracts X X X X X X X X Extracts X X X X ..... X of the Customs Act provides for deposit of goods into a customs bonded warehouse licensed under section 57 or 58 or 58A without payment of duty and the procedures to be followed with respect to the warehoused goods. Sub-section (5) of section 59 provides that the importer is at liberty to transfer the ownership of such goods to another person while the goods remain deposited in the warehouse. 3. It is to be noted that the value of imported goods, for purposes of charging customs duty, is determined as per section 14 of the Customs Act, 1962 at the time of import i.e. at the time of filing of the into-bond Bill of Entry. Any costs incurred after the import of goods, such as, port charges / port demurrage charges or costs for customs cle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Thus, such a transaction of sale/transfer will be subject to IGST under the IGST Act. The value of such supply shall be determined in terms of section 15 of the CGST Act read with section 20 of the IGST Act and the rules made thereunder, without prejudice to the fact that customs duty (which includes BCD and applicable IGST payable under the Customs Tariff Act) will be levied and collected at the ex-bond stage. 5. Thus, in respect of goods stored in a customs bonded warehouse, there is a possibility that certain cases may involve an additional taxable event, if a transfer of ownership of warehoused goods takes place between the importer and another person, before clearance of the goods, whether for home consumption or for export. 5.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arehouse. BCD and IGST (Section 3(7) of Customs Tariff Act 1975) are deferred. Illustration of duty deferment: A: Value of goods = ₹ 100 B: say BCD is 10% = ₹ 10 (10% of ₹ 100) C: say IGST is 12% = ₹ 13.2 (12% of ₹ 110) D: Duty Deferred (B+C) = 23.20 A sells the goods to B on 21st July 2017 for ₹ 300 and charges IGST of ₹ 36 @12% (IGST) Payment of the above IGST of ₹ 36 and filing of return for the same should be done by 20th August 2017 B files an Exbond Bill of entry on 25th of September 2017 and pays ₹ 23.20 (the deferred duty). (In addition to duty of ₹ 36 paid earlier as indicated in Box-C). - Circular - Trade ..... X X X X Extracts X X X X X X X X Extracts X X X X
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