Exporter allowed import of goods without payment of IGST: Delhi HC

Introduction

The Delhi High Court has allowed the exporter to import the goods without payment of IGST through an interim order to the extent allowed by the advance authorizations received by him before 1^st July, 2017.

It is a big relief to all the exporters since under GST; there is no provision of importing goods without IGST even if the inputs are incorporated into final products for exports.

Position under Advance Authorisation Scheme (AAS)

Prior to 1^st July 2017, under Advance Authorisation Scheme (AAS), exporters were exempt from paying the taxes like basic customs duty, additional customs duty, and education cess. However, after 1^st July 2017 the benefit is extended only to basic customs duty and IGST is required to be paid on domestic procurement and later on, claim the refund.

Brief facts about the case

The petitioner has contended that claiming the refund after payment of IGST has adversely affected the working capital of the business and which actually impacting the export orders received prior to 1^st July 2017 for which he had to import the inputs to complete the export orders.

He further states that under GST he has no option but to pay IGST from his own resources and claim refund afterward. However, to the time gap, it seriously causes the shortage of working capital to the business. Further, the exporter also claims that he has already used the overdraft limit with the bank.

Counter from the custom department

The customs department has said that the petitioner could apply for the refund of the IGST after the completion of the export order and hence there is no case of this grievance.

In reply, the petitioner said that the mechanism of IGST being ultimately refunded was little consolation. He said he requires liquidity to discharge the additional levy of IGST failing which the import would be blocked.

Interim order by the Court

After listening to the argument and the counter argument, the court decided to provide relief to the exporter and allowed him to import the goods without payment of IGST to the extent allowed by the advance authorizations received by him before 1^st July 2017.

Conclusion

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