TMI BlogImported goods found defective and this, no consideration payable to the foreign sellerX X X X Extracts X X X X X X X X Extracts X X X X ..... Goods were imported from China and supplied to a customer in India who in turn supplied it to a government department. But later such goods were found defective and rejected by the department and returned to the ultimate importer. Custom duties IGST was duly paid. Upon discussion with the Chinese supplier, they agreed with the defects and waived the consideration without return of such goods. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Now, goods are lying with the importer which will be sold as scrap later. Now, my question is whether consideration not paid/payable to the Chinese supplier will result in any kind of legal default or comolication under GST, FEMA, Customs, etc.? - Reply By YAGAY andSUN - The Reply = Please check the terms and condition of your agreement in this regard. Since your supplier has accepted that g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods were of inferior quality and having certain defects, therefore, waived the foreign remittance against such supply. On GST front, we don't foresee any issues, since goods were rejected by the ultimate user as No ITC will be available. On FEMA front, you would have to inform your Banker (AD) about such rejection of goods and waiver of payments by the foreign supplier to get its impact on I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DPMS. On customs front, thought not necessary, you may send an intimation letter to show your bona fide about the whole gamut along with documentary evidences/complete chain of documents that defected goods are destroyed or sold as scrap. - Reply By SHIVANSH MEHRA - The Reply = Thank you for the reply. In my opinion, there might be issues in availing IGST on imports as we might have to write o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ff the Credit balance of the Chinese supplier which will in turn attract Section 17(5) of the CGST Act . Though proviso to Section 16(2) of the CGST Act s not applicable. - Reply By YAGAY andSUN - The Reply = We are in agreement with you on your undertaking and submission. - Imported goods found defective and this, no consideration payable to the foreign seller - Query Started By: - SH ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IVANSH MEHRA Dated:- 23-5-2020 Customs - Import - Export - Customs - SEZ - Got 3 Replies - Customs - Discussion Forum - Knowledge Sharing, reply post by an expert, personal opinion Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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