Home Case Index All Cases GST GST + AAAR GST - 2019 (4) TMI AAAR This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (4) TMI 1542 - AAAR - GSTLevy of GST - sales and /or purchase of DFIA (Duty Free Import Authorisations) - applicability of serial no. 122a of the Notification No. 2/2017 - C.T. (Rate) inserted vide Notification No. 35/2017-C.T. (Rate) dated 13/10/2017 - whether DFIA (Duty Free Import Authorisations) is duty credit scrips or otherwise? - HELD THAT:- Once it is established that the duty credit scrips issued under SEIS and MEIS, and DFIA are construed as same in the trade parlance dealing with these licenses or scrips and widely called as duty paying scrips or licenses or duty credit scrips due to their common functionality and nature, it is imperative that their classification would be the same despite the differences in the technicalities of their issuance in that duty credit scrips are issued under the MEIS & SEIS envisaged in chapter 3, while the DFIA are issued under Chapter 4. The intention of the law maker was crystal clear in that they wanted to give immediate relief to the exporters, who were facing great deal of difficulties due to the existing GST policies along with other technical glitches in the implementation of the GST provisions, by incentivizing their export related activities. It is under this vision and objective that the GST, on the treading of the duty credit scrips, was reduced from 5% to 0% for the promotion of the export, thus restoring the incentives held by the duty credit scrips and adding potential to the marketability of such scrips. All these proposals and recommendations made in the 22nd GST council meeting is comprehensibly and rightfully applicable in the case of DFIA for the reason that the DFIA is also issued by the DGFT for the benefit of the exporters by awarding them incentives on the exports done by them. The DFIA, also popularly known as duty paying scrips in the trade parlance is equivalent to the duty credit scrips, as far as the tax treatment thereon, are concerned and accordingly, there will be nil rate of GST on the sale or purchase of DFIA as provided in Sr. 122A of the Notification 02/2017-C.T. (Rate) dated 28.06.2017 as amended by the Notification No. 35/2017-C.T. (Rate) dated 13.10.2017.
|