9911796707
TMI Blog2019 (2) TMI 195X X X X Extracts X X X X X X X X Extracts X X X X ..... called BNSI or Applicant) is a leading multinational financial service provider in India, having market leadership in the bullion business. The Bank became the first Bullion bank to set up its operations in India way back in 1997 under the brand name Scotia Mocatta. Since then, Scotia Mocatta has been at the forefront of the bullion industry being the largest supplier of precious metals. Through its network of branches and its bullion vaults established across India, it caters to the bullion requirements of Jewellers, Exporters, Nominated agencies such as Minerals & Metals Trading Corporation (MMTC), Banks & Mutual Funds (Gold ETF's). The applicant has sought Advance Ruling on: 1. Whether IGST is payable on Goods warehoused in FTWZ and supplied to a DTA unit, in addition to the customs duty payable [i.e. Basic Customs Duty(BCD) + IGST] on removal of goods from the FTWZ unit? 2. Whether the Circular No. 46/2017 is applicable to the present factual situation? The Applicant has submitted the copy of application in Form GST ARA - 01 and also submitted a copy of Challan evidencing payment of application fees of Rs. 5,000/- each under sub-rule (1) of Rule 104 of CGST rules 2017 and S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the units would be treated as distinct persons under CGST Act. Hence, the transaction of transfer of goods from FTWZ to DTA unit of BSNI can fall within the ambit of supply. Further as per circular 46/2017, the Central Board of Excise & Customs (CBEC) has clarified that 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 and therefore, be taxable as an 'inter-state' supply under Section 7(2) of the IGST Act. In light of this Circular, the applicant has submitted that in the present factual situation, in respect of goods stored in the FTWZ unit, will involve an additional taxable event since the FTWZ unit and DTA unit would be treated as a separate entity. Further, the applicant has stated that removal of goods from FTWZ unit to DTA unit of BNSI being an import transaction, subject to Customs duty under Customs Act, cannot be said to have another separate taxable event to attract IGST under the IGST Act. In the case whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is concerned, the units would be subject to similar provisions as are applicable to units in SEZs. These goods shall also be permitted to be sold in the DTA on payment of customs duties as applicable on the date of such sale. Payment of duty will become due only when goods are sold /delivered to DTA and no interest will be charged as in the case of bonded warehouses. In the present case, the Applicant is storing the imported goods in FTWZ which is a Customs bonded warehouse. Now, the applicant has raised the question whether IGST under section 5(1) read with Section 7(2) of the IGST Act in addition to the customs duty payable [i.e. Basic Customs Duty(BCD) + IGST] under Customs Tariff Act , 1975 on removal of goods from the FTWZ unit i.e. the customs bonded warehouse. 4.2. We find that the above issue has been raised and discussed in the 27th meeting of the GST Council held on 04.05.2018 as under: Agenda Item 5: Clarification regarding applicability of Integrated Goods and Services Tax on goods supplied while being deposited in a warehouse Goods imported into India are subjected to customs duties and integrated tax under sub-section (7) of section 3of the Customs Tariff Act, 1975 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ple approval to declare the supply of warehoused goods within the Customs bonded warehouse as 'no supply' under Schedule III of the CGST Act, 2017 so as to ensure that no integrated tax is paid at the time of supply of warehoused goods by the importer to the buyer. Since the amendment of the law would take time, it is proposed that such intention/ decision of the GST Council may be effected through a circular. 5. In view of the above, it is proposed that Circular No. 46/2017-Customs dated 24.11.2017 may be rescinded and a fresh circular may be issued clarifying that supply of warehoused goods before their clearance from the warehouse would not be subject to levy of integrated tax and the same would be collected only when the warehoused goods are cleared for home consumption from the customs bonded warehouse. This clarification would be applicable from 1st of April, 2018. Accordingly, a draft circular as at Annexure-I is placed for approval of the GST Council. Accordingly, Circular No.3/ 1/2018-IGST dated 25th May 2018 was issued reexamining the issues of Circular No. 46/2017 Customs dated 24.11.2017. The Circular clarifies the applicability of IGST on goods supplied while being d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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