Applicability of GST on auction by the custodians

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..... Applicability of GST on auction by the custodians
Query (Issue) Started By: - Vel Murugan Dated:- 24-12-2021 Last Reply Date:- 26-1-2022 Goods and Services Tax - GST
Got 3 Replies
GST
Dear Sir, Could you please throw some light on the following. In some cases, a person actually imports the goods but has not come forward to clear the goods from Customs due to many reasons. Hence, the .....

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..... goods are lying in the customs bonded premises. As per Sec 48 of the Customs Act,1962, the custodian (usually the cfs) sell the goods under auction, after getting approval from the Customs dept. Consideration received through bidding is cum-duty price for the purpose of Customs Act. Hence, BCD, IGST and other customs component are deducted and remaining amount is retained by the custodian. Usuall .....

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..... y this amount is considered as the price in lieu of their service by way of storage/ other services. In pre-GST era, it is clear that since recipient does not exist (actual importer is not known) activities of providing storage service can not be qualified as a service [any activity provided by a person, for ANOTHER, for consideration]. However, in GST, taxable event is supply and definition of s .....

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..... upply is broad as per Sec.7 which is inclusive definition and starts with all forms of supply of goods and services or both. This being the scope of supply, whether amount retained by the custodian attracts GST liability? Reply By Alkesh Jani: The Reply: Shri With regards to your query, my views is, when goods are sold by auction, the title of goods are transfer to the buyer of the goods. The b .....

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..... uyer is liable to pay customs duty as applicable. The remaining amount are consideration for supply of storage/ warehouse service and is liable to GST. Thanks Reply By KASTURI SETHI: The Reply: I agree with the views of Sh.Alkesh Jani Ji. Reply By CAHemanth Kumar: The Reply: In case if the amount is in the nature of deposit, GST will be applicable only when such deposit is adjusted for the s .....

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..... torage services etc.
Discussion Forum - Knowledge Sharing .....

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