SME Chatroom: Import of Covid-19 vaccine will attract Integrated GST

The notification no.28/2021-Cus dated April 24, 2021 does not exempt IGST leviable on medical goods

We had obtained an EPCG authorisation in March 2016, i.e. in the year 2015-16. The stipulation of annual average exports was based on exports made in 2012-13, 2013-14 and 2014-15. In 2015-16, we could not achieve even the annual average exports, as the authorisation was issued in March 2016 and the capital goods were imported under the authorisation in the year 2016-17. Can we approach the EPCG committee to re-fix the annual average on the basis of exports made in 2013-14, 2014-15 and 2015-16?
 
You can approach the EPCG committee with your request, but I think you will have to be very lucky to get a favourable decision from the committee.

 
We have received an order from a German party for supply of certain goods to a party in India. Full payment is received in advance in foreign currency. Do we have to charge GST on such supply or is the supply zero-rated?
 

As the goods do not leave the country or go to a SEZ unit or developer, the supply cannot be treated as exports and so, cannot be zero-rated. The supply will attract GST.
 
For our new project, we intend to import certain goods falling under Chapters 84, 85, 39 and 90 of the Customs Tariff. Are we required to pay Agriculture Infrastructure and Development Cess (AIDC) on such goods?

 
No. S.No.17 of the notification no.11/2021-Cus dated February 1, 2021, fully exempts AIDC on all goods other than those mentioned at S.Nos.1 to 16 of that notification. Goods falling under Chapters 84, 85, 39 and 90 of the Customs Tariff are not covered in any of the entries mentioned at S.Nos.1 to 16 of that notification. So, they will get covered under the said S.No.17 and thus, fully exempted from AIDC.
 
The government has exempted customs duty and health cess on import of oxygen, oxygen-related equipment and Covid-19 vaccines, up to July 31. Will they be exempted from IGST also?

 
No. The notification no.28/2021-Cus dated April 24, 2021 does not exempt IGST leviable on such goods.
 
We are recognised as Authorised Economic Operators-Tier 1 (AEO-T1). On our imports from Malaysia, we claimed preferential rate of duty under the ASEAN FTA. The Customs have initiated verification under the Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020. Our subsequent imports from the same source under claim of preferential duty rates are being assessed provisionally. Our Customs Broker says that the Customs are insisting on bank guarantee for the differential duty on such consignments although we, as AEO-T1, are required to give bank guarantee for only 50 per cent in terms of CBEC Circular no.33/3016-Cus dated July 22, 2016. Are the Customs correct?

 
The CBIC Circular no.42/2020-Cus dated September 29, 2020 prescribes bank guarantee for 100 per cent of differential duty for all classes of importers, including AEOs (all tiers), whenever the importer requests provisional assessment in cases where verification is initiated under the said Rules.
 
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