Petition denying Relief to Importers: Gujarat High Court asks response from Govt

- Gujarat High Court - Taxscan

A petition has been filed before the Gujarat High Court wherein the validity of a clause in the goods and services tax ( GST ) law that denies benefits to traders who import input goods after their finished products are exported has been challenged. Admitting the petition, the High Court issued a notice to the Central Government seeking its response.

Considering the delay in filing the reply from the Government’s side until now, the Court said it would otherwise summon the secretaries concerned to the courtroom to present the facts in the case.

Recently, the GST law was amended to introduce a pre-import condition to be followed by exporters holding advance authorization licenses to avail of duty exemptions. The provision denies benefits of integrated goods and services tax applicable to interstate transactions to imports that take place after exports.

Advance authorization licenses are issued to allow duty-free import of inputs, which are used to make finished products for export.

The Directorate of Revenue Intelligence, India’s primary anti-smuggling agency, has started issuing show-cause notices to exporters for wrongfully availing of exemptions in cases where their exports preceded imports. They were asked to pay IGST in cases where raw material was imported only after goods were partially or fully exported.

taxscan-loader