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TMI Blog2024 (8) TMI 1060X X X X Extracts X X X X X X X X Extracts X X X X ..... LD THAT:- Unlike in the case of customs duties, no rate of IGST is prescribed either in the schedules to the Customs Tariff Act or under any notification issued under the Customs Tariff Act. Section 3 of the Customs Tariff Act refers to the IGST payable under section 5 of the IGST Act. In other words, whatever is payable under the IGST Act on inter-state supplies within India is payable under section 3 of the Customs Tariff Act read with section 5 of the IGST Act if the supplies are in the course of importation. When interest is payable on delayed payment of IGST on inter-state supplies within India, the same bill also apply to delayed payment of IGST on imports. This is especially so since section 3 of the Customs Tariff Act makes IGST payable under IGST Act. There are no legal basis or reason to hold that the interest payable on delayed payment of IGST does not apply if such delayed payment is on supply in the course of imports. The impugned order upheld - appeal dismissed. - MS. BINU TAMTA, MEMBER (JUDICIAL) AND MR. P. V. SUBBA RAO, MEMBER (TECHNICAL) Present for the Appellant : Shri Yash Dhadda, Chartered Accountant Present for the Respondent: Shri Rajesh Singh and Shri S K R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... luntarily paid IGST along with interest; (ii) The interest was paid as calculated by the system; (iii) IGST was paid under section 83(3) of the Customs Tariff Act, 1975 it does not provide for payment of interest. (iv) There was no power under the law to impose interest on additional duty of customs in the form of IGST; (v) Bombay High Court in the Case of Mahindra and Mahindra Limited vs. Union of India [ 2022-TIOL-1311-SC-MUM-CUS ] held that there is no mechanism to pay interest or penalty on delayed payment of Cess or special additional duty. This decision was upheld by the Supreme Court while dismissing the SLP filed by the Revenue as [ 2023(386) ELT 11 (SC) ] . (vi) Therefore, the appellants were not required to pay interest at all on the delayed payment of IGST which must be refunded to them. Refunds have been wrongly denied by the lower authorities. 7. Learned authorised representative for the Revenue made the following submissions: i) The appellants had voluntarily requested for re-assessment and paid the IGST and interest as applicable. The interest was due to the delay in payment of IGST in the Bills of Entry. After depositing the IGST along with interest the appellants a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te authority i.e. Commissioner of Customs (Appeals). viii) Interest is a consequence of delayed payment of duty or tax. As held by the Hon ble Supreme Court in case of M/s Navyuga Engineering co Ltd Vs Union of India Others in Civil Appeal No. 1024/2014 once section 28 applies for determination of duty obligation arising under section 125(2) of the Customs Act, the interest on delayed payment of duty arises under section 28AB of the Customs Act, 1962. ix) Hence, the Appellants were liable to also pay the interest on IGST amount, and had correctly paid it and there is no basis for refund of interest. Therefore, the original adjudicating authority rightly rejected the refund claims which decisions were correctly upheld by the Commissioner of Customs (Appeals). x) The impugned orders may be upheld and the appeals may be dismissed. 8. The submissions advanced by learned chartered accountant for the appellants and the learned authorised representative for the Revenue have been considered. The following questions need to be answered by us in these two appeals: a) Can the appellants claim refund on the basis of a judgment passed in the case of some other assessee? b) Can the appellants cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the proper officer under section 28 to modify the assessment. However, Section 28 (1) (b) provides for the importer to pay differential duty along with interest on its own and in such cases, the proper officer cannot issue an SCN. The appellants, realizing that they needed to pay the IGST, paid it under Section 28(1)(b) along with interest. Therefore, no SCN was issued by the proper officer and the modification of the original self-assessment attained finality. This assessment has not been assailed before any higher judicial forum. As per the ratio laid down in ITC Ltd., the appellants cannot claim refund without assailing the assessment. 11. This leads us to the next question as to whether the IGST on the imported goods is an additional duty of Customs (as asserted by the learned counsel) or it is IGST. 12. To examine this question, we need to examine the taxable event. Every tax or duty becomes leviable on the occurrence of a taxable event and not otherwise. For instance, earning of income is the taxable event for income tax, manufacture is the taxable event for excise duties, sale is the taxable event for sales tax, etc. The power of the Union or the State to levy tax or du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... divisible pool of taxes under Article 270 which are shared between the Centre and States as per the recommendations of the Finance Commission. 16. Goods and Services Tax is levied on the supply of goods and services and not on importation . The expression Goods and Services Tax can be understood from the definition in clause (12A) of Article 366. It reads as follows: 366. Definitions. In this Constitution, unless the context otherwise requires, the following expressions have the meanings hereby respectively assigned to them, that is to say- (12A) goods and services tax means any tax on supply of goods, or services or both except taxes on the supply of the alcoholic liquor for human consumption 17. If the supply of goods and services is across the states, such inter-state supply is the taxable event for levy of IGST. Article 246A provides for collection of Goods and Services Tax notwithstanding Article 246. Clause (2) of this Article empowers the Union to levy IGST. It reads as follows: Article 246A Special provision with respect to goods and services tax (1) Notwithstanding anything contained in articles 246 and 254, Parliament, and, subject to clause (2), the Legislature of every ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n (1) Subject to the provisions of sub-section (2), there shall be levied a tax called the integrated goods and services tax on all inter-State supplies of goods or services or both , except on the supply of alcoholic liquor for human consumption, on the value determined under section 15 of the Central Goods and Services Tax Act and at such rates, not exceeding forty per cent., as may be notified by the Government on the recommendations of the Council and collected in such manner as may be prescribed and shall be paid by the taxable person: Provided that the integrated tax on goods other than the goods as may be notified by the Government on the recommendations of the Council imported into India shall be levied and collected in accordance with the provisions of section 3 of the Customs Tariff Act, 1975 (51 of 1975) on the value as determined under the said Act at the point when duties of customs are levied on the said goods under section 12 of the Customs Act, 1962 (52 of 1962). (2) The integrated tax on the supply of petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas and aviation turbine fuel shall be levied with effect from such date as may b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mission. Various streams of revenue and expenditure of the Central Government are accounted for under various Major Heads and further under various minor heads within each major head of the budget. A perusal of the Budget presented by the Union Government for the year 2022-23 shows the following major heads for various types of taxes and duties. (a) Goods and Services Tax Central Goods and Services Tax (CGST) 0005 Union Territory Goods and Services Tax (UTGST) 0007 Integrated Goods and Services Tax (IGST) 0008 Goods and Services Tax Compensation Cess 0009 (b) Taxes on Income and Expenditure Corporation Tax 0020 Taxes on Income Other Than Corporation Tax 0021 Hotel Receipts Tax 0023 Interest Tax 0024 Fringe Benefit Tax 0026 Other Taxes on Income and Expenditure 0028 (c) Taxes on Property and Capital Transactions Stamps and Registration Fees 0030 Estate Duty 0031 Taxes on Wealth 0032 Securities Transaction Tax 0034 (d) Taxes on Commodities and Services other than Goods and Services Tax Banking Cash Transaction Tax 0036 Customs 0037 Union Excise Duties 0038 Sales Tax 0040 Service Tax 0044 Other Taxes and Duties on Commodities and Services 0045. 23. Thus, IGST is accounted for under th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mission. 27. The taxable event for levy of IGST is the inter-state supply of goods and services which definition also includes supply in the course of importation. The charging section for collection of IGST on the imported goods is section 4 of the IGST Act read with section 3(8) of the Customs Tariff Act. The Constitutional mandate for collection of IGST is clause (2) of 246A. IGST is credited to Major Budget head 0008 and it has to be apportioned between the Centre and States as decided by Parliament on the recommendations of GST Council. Therefore, the IGST collected when goods are imported is not a duty of customs. 28. The last question to be answered by us if interest is payable on IGST which is paid late. The submission of the learned counsel for the appellant is that Bombay High Court held in Mahindra and Mahindra that no interest is chargeable on the additional duty of customs levied under section 3 of the Customs Tariff Act, 1975 and therefore no interest can be charged on the IGST. We find that this judgment was delivered in a matter where the SCNs were issued in 2004 and 2005 well before the GST was introduced in 2017. At that time, Additional duty of Customs was leviab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed under Major Budget Head 0037 and they form part of the divisible pool of taxes distributed between the Centre and State as per the recommendations of the Finance Commission d) IGST is a tax on the supply of goods- the power to levy IGST flows from Article 246A of the Constitution. IGST is credited to Major budget head 0008 and it gets apportioned between the centre and states as decided by Parliament on the recommendations of the GST council. e) What is levied on supply in the course of importation is IGST and it is not a duty or an additional duty of Customs; the judgment in Mahindra and Mahindra pertains to additional duty of customs in pre-GST regime. f) IGST is chargeable on supplies in the course of imports under section 3 of the Customs Tariff Act read with section 5 of the IGST Act. Section 20 of the IGST Act made some provisions of CGST Act applicable to IGST including the section 50 which makes interest payable. Thus, interest is payable on delayed payment of IGST where the supplies are made within India and the same applies to interest on delayed payment of IGST on imports. g) Thus, the appellants had correctly paid the interest on delayed payments of IGST and both the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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