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Delhi HC issues notice to GST Council, others on double taxation issue

The matter would come up for hearing on March 8

Indivjal Dhasmana  |  New Delhi 


The has issued notices to the Union government, the and the (CBEC) over the issue of on sold from one to another. The matter would come up for hearing on March 8. Abhishek Rastogi of Khatian & Co said the issue relates to a Customs circular that has raised fears of the government imposing integrated (GST) twice on these kinds of transaction. Also, the company paying the taxes will not be able to get input tax credit, he said. Suppose a company imports goods and keeps it in its It then sells it to another company which keeps the goods in its own bonded warehouse.

The second company will have to pay Customs duty and integrated GST (IGST) twice. Also since the first company has not paid duties, the second one will not get the credit. Petitioner Aditya Mody of Devashish Polymers said, “It will become very difficult to sell goods while those are in bonded premises.” The had issued a circular clarifying that any supply of taking place before the goods crosses Customs frontiers of India should be treated as an inter-state supply and such transaction for sale and transfer would be subject to This is without prejudice to the levy of Customs duty and collection of duty at ex-bound stage. The industry is worried since it would impact its cash flow and compliance. The impact would be on the warehousing models, including impact on supplies from special economic zones.

First Published: Sat, December 23 2017. 00:49 IST