We are importing goods regularly and are also buying goods through SEZ from indian supplier.
In some cases,we are not getting input of Imports and SEZ purchases under 2B statement of our Imports as well SEZ though we have with us all BE and other documents. Please guide can we claim Input in 3B on the basis of documents of purchase though it is not appearing in 2B as per new rules of claiming Input. In few cases Input is auto populated in 2B after 4-6 months. Now how to get credit of Input under such circumstances.
D K Aggrwal
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I presume you have procured goods thru sez with full duty. As per the new rules in order to claim credit the amount has to appear in 2B. You can still take credit of those invoices in your 3B, but you run the risk of getting auto-generated notice from the department regarding excess credit availed. You could raise a ticket on the GST portal for BOE (both imported and indigenous from sez) not appearing in your 2B.
May I draw the kind attention of the querist and the expert to the following:
1.The clearance from the Special Economic Zone (SEZ) to Domestic Tariff Area is governed by by the provisions of SEZ law read with the Customs Law. In this regard, clearance from SEZ to DTA is required to be made by filing of Bill of Entry(BoE). In terms of Section 51 of the SEZ Act, 2005, it has an overriding effect on all other laws including the GST Law.
2. GST portal does not populate ITC pertaining to Bill of Entry in the case of import of goods from outside India and import from SEZ ( collectively known referred to as " Import Transactions"). Therefore, ITC balance pertaining to Import Transaction is not appearing in GSTR-2A.
3. Further please refer to the Para 3 of the Circular No. 123/42/2019-GST dated 11/11/2019 issued by the CBIC,which has clarified that ITC of IGST paid in respect of import transactions may be availed without any restrictions under Rule 36(4) of the CGST Rules, 2017, as they are outside the ambit of Section 37(1) of the CGST Act, i.e., not required to be uploaded by the supplier in GSTR-1 return filed by them and therefore they not appear in GSTR-2A of the recipient.
4. I refer here the instruction 9 to GSTR-1 which provides that the supply made by SEZ unit to DTA unit without the cover of BoE is required to be reported in GSTR-1. Therefore any supplies which are under the cover of BoE are not required to be reported in GSTR-1 of SEZ Unit.
5. Ex facie, the department will issue notices for the such possible mismatches. Only the effective explanation needs to be furnished reflecting the factual matrix of each case independently.
Subject experts are requested to throw further bright light on this issue.
Thanks for the reply and guidance. The GST people are not accepting our reply but have not taken any action so far.
But now with the new rules of allowing Input as per 2B only, we are afraid our reply may not be accepted and we may be asked to deposit the difference. We have made a complaint on the portal but no action with the reply we may write to Custom etc directly.
This problem must be faced by many others importers in India and we donot know as how they are managing this problem.
Any solution to avoid mismatch notice of GST department. Kindly guide
D K Aggarwal
1. In continuation of my reply dated 15/01/2022 I further say that, Part-A(IV) of FORM GSTR-02B contains the details of import of goods including from SEZ. It also contains information on imports of goods from the Indian Customs Electronic Gateway (ICEGATE) system including data on imports and will be continued to be entered by tax payers in Table 4(A)(2) of FORM GSTR-03B. So in any eventuality, ITC of IGST on imports including from SEZ shall not be denied.
2. However in my reply at Para No. 3, the view drawn from the said Circualr was my personal opinion. The readers are requested not to get influenced by it and they are free to have their own correct analysis so that the real expression of the law is not distorted.
Thank you very much.
With the reply at serial no.4 by Sh.Sadanand Bulbule Sir, there is no risk of mismatch now.
Thank you very much Sri.Kasthuri Sethi Sir for your esteemed endorsement. This would double the confidence of the honest tax payers by eliminating the horrendous effects of mismatch.
I do not agree with you on this point - "GST portal does not populate ITC pertaining to Bill of Entry in the case of import of goods from outside India and import from SEZ ( collectively known referred to as " Import Transactions")".
The SEZ online system is integrated with ICEGATE and the GST portal. If for any reason your imports are not reflecting in your GSTR 2B, you need to raise ticket with GST portal or reach to sez online helpdesk, they will rectify any mapping issues that may be there.
I agree with the views of the experts. IGST on import is a self paid tax and therefore not to connect with newly added condition u/s 16(2)(a)(a)
Thanks for your guidance on the subject.
We have decided to claim the Input on Imports as per our invoices and shall give reply
to the notice when received. IN the meantime we are trying to adopt all methods to get Input in 2B.
Thanks once again for all your support
D K Aggarwal
Sir, an email came after filing GSTR-3B this month stating that IGST of import is not flown from ICEGATE to GSTN becuase of want of Aadhar Authentication of Authorised Signatory and Promoter/MD. Have you also received the same message. If yes, please comply that and after that iGST shall populate into GSTR-2B.
On clear reading of section 16(2)(aa) we can say that it will apply only for invoice debit note that are to be furnished by the supplier. This will not apply for BoE as there is no supplier to update the same.
[(aa) the details of the invoice or debit note referred to in clause (a) has been furnished by the supplier in the statement of outward supplies and such details have been communicated to the recipient of such invoice or debit note in the manner specified under section 37;]
Further clause (a) refers that the credit can be claimed based on an invoice or debit note or any other document as may be prescribed.
BoE and ISD will come under any other document category as per rule 36.
Thereby in my view restriction of credit as per 16(2)(a)(a) will not apply for imports, SEZ procurements and ISD invoices.