TMI Blog2019 (2) TMI 195X X X X Extracts X X X X X X X X Extracts X X X X ..... , under the Provisions of Customs Tariff Act. Therefore, there is no requirement to pay IGST under the provisions of GST law at the time of clearance from the FTWZ. In the case at hand, the Applicant proposes to effect sale when the goods are bonded and then files Bill of Entry for Home Consumption and clears the goods from the FTWZ on payment of appropriate Custom duties (BCD & IGST). Therefore, as clarified in the Circular No.3/1/2018-IGST dated 25th May 2018, the payment of IGST again at the point of clearance from the FTWZ to DTA do not arise for supply of warehoused goods, while being deposited in a customs bonded warehouse/FTWZ on or after 01.04.2018 - Circular No. 46/2017 Customs dated 24.11.2017 is not applicable for supply of warehoused goods, while being deposited in a customs bonded warehouse/FTWZ on or after 01.04.2018. - Order No. 23/AAR/2018 - - - Dated:- 31-12-2018 - MS. MANASA GANGOTRI KATA, IRS AND THIRU S. VIJAYAKUMAR, M.SC, MEMBER Note : Any Appeal against the Advance Ruling order shall be filed before the Tamil Nadu State Appellate Authority for Advance Ruling, Chennai under Sub-section (1) of Section 100 of CGST ACT/TNGST Act 2017 within 30 days fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs in India. 2.1 The Applicant have submitted that they are now contemplating altering the modality of the aforesaid transaction, so as to operate from a Free Trade Warehousing Zone ( FTWZ ). Under this proposed transaction, the gold/ silver will be stored in an FTWZ Unit on account of BNSL and withdrawn by BNSI as and when required for sale to customers in India by BNSI. It is proposed that BNSL will enter into an agreement with Brinks India Pvt Limited who already has a unit in a FTWZ. Brinks India Pvt. Ltd., has entered into a back to back contract with Siddharth Logistics Co Pvt Ltd who is an authorized FTWZ unit operating in the SEZ of Shree City for providing the warehousing services to the clients of Brinks India Pvt. Ltd.,. As per the Letter of Approval granted to Siddharth Logistics, it is authorized to undertake the activity of storage, warehousing, custodian etc. In terms of aforesaid agreements, the FTWZ unit i.e. Siddharth Logistics will undertake the warehousing on account of clients of Brinks i.e. BNSL. 2.2 The modus operandi for this proposed transaction is set out hereunder: a. Under the present option, BNSI files a BoE for import of gold/ silver into Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he view that removal of goods from FTWZ unit to a DTA unit of BNSI should not be subject to IGST under the Section 5 read with Section 7(2) of the IGST Act. 3. The Authorized Representative of the Applicant was personally heard in the matter . They stated that there are several proposed supplies involved for BSNL, BSNI and FTWZ. BNSI would file Bill of Entry for Import of gold/silver from BNSL and store the same in FTWZ unit, which is owned and operated by independent third party who merely warehouse the goods. BNSL would pay the warehousing charges to FTWZ unit. The warehoused goods would be removed to DTA unit of BNSI by filing Bill of Entry for Home consumption by DTA unit of BNSI on payment of Customs duty. Subsequently, they supply the same to their Indian Customers on payment of appropriate GST. 4. The issue before us is to determine whether the removal of goods from FTWZ unit to a DTA unit of BNSI should be subject to IGST under section 5(1) read with Section 7(2) of the IGST Act in addition to the customs duty payable [i.e. Basic Customs Duty(BCD) + IGST] on removal of goods from the FTWZ unit. In the case at hand, the applicant imports the goods from BNSL, files int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he deferred customs duty at the time of clearance of goods from the warehouse. It has been represented that in this scenario, the buyer is being saddled with double taxation. 2. Kind attention is drawn towards sub-section (2) of section 7 of the Integrated Goods and Services Tax Act, 2017 (hereinafter referred to as the IGST Act ) whereby supply of goods imported into the territory of India, till they cross the customs frontiers of India, is treated as a supply of goods in the course of inter-State trade or commerce. Further, proviso to sub-section (1) of section 5 of the IGST Act provides that integrated tax on goods imported into India would be levied and collected in accordance with the provisions of section 3 of the Customs Tariff Act, 1975 (hereinafter referred to as the CTA ). Thus, in case of supply of such warehoused goods the point of levy would be the point at which duty is collected under section 12 of the Customs Act, 1962 (hereinafter referred to as the Customs Act ) which is at the time of clearance of goods under section 68 of the Customs Act. 3. Furthermore, sub-section (8A) has been inserted with effect from 31st March, 2018 in section 3 of the CTA vid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... words, the supply of goods before their clearance from the warehouse would not be subject to the levy of Integrated tax and the same would be levied and collected only when the warehoused goods are cleared for home consumption from the customs bonded warehouse, under the provisions of Customs Act. This circular was made applicable for supply of warehoused goods, while being deposited in a customs bonded warehouse on or after 01.04.2018. 4.3 From the foregoing, it is evident that removal from the FTWZ to DTA is the point of deferred levy/payment of Customs Duty, i.e., at the time of clearance for home consumption from FTWZ. Further, as explained in the Circular referred above, the goods are not to be subjected to IGST when bonded and the payment of integrated tax is to be effected when the goods are removed for home consumption from the bonded warehouse, under the Provisions of Customs Tariff Act. Therefore, there is no requirement to pay IGST under the provisions of GST law at the time of clearance from the FTWZ. In the case at hand, the Applicant proposes to effect sale when the goods are bonded and then files Bill of Entry for Home Consumption and clears the goods from the FT ..... X X X X Extracts X X X X X X X X Extracts X X X X
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