CBIC notification to levy IGST on Imports under Advance Authorization which violates pre-import conditions


Central Board of Indirect Taxes and has issued notification dated 7th June 2023, for Implementation of Hon’ble Supreme Court direction in judgment dated 28.04.2023. Imports under Advance Authorization for physical exports are also exempt from whole of the integrated tax and compensation cess but shall be subject to pre-import condition. Hon’ble Supreme Court implies that the relevant imports that do not meet the said pre-import condition requirements are to pay IGST and Compensation Cess to that extent.

For purpose of carrying forward the Hon’ble Supreme Court’s directions, the following procedure can be adopted at the port of import (POI):

  1. For the relevant imports that could not meet the said pre-import condition and are hence required to pay IGST and Compensation Cess to that extent, the importer (not limited to the respondents) may approach the concerned assessment group at the POI with relevant details for purposes of payment of the tax and cess along with applicable interest.
  2. The assessment group at POI shall cancel the OOC and indicate the reason in remarks. The Bill of Entry shall be assessed again so as to charge the tax and cess, in accordance with the above judgment.
  3. The payment of tax and cess, along with applicable interest, shall be made against the electronic challan generated in the Customs EDI System.
  4. On completion of above payment, the port of import shall make a notional OOC for the BE on the Customs EDI System [so as to enable transmission to GSTN portal of, inter alia, the IGST and Compensation Cess amounts with their date of payment (relevant date) for eligibility as per GST provisions.
  5. The procedure specified at (a) to (d) above can be applied once to a BE.

DGFT has also informed that all the imports made under Advance Authorization Scheme on or after 13.10.2017 & upto and including 09.01.2019 which could not meet the pre-import condition may be regularized by making payments as prescribed in the Customs Circular.

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