TMI Blog2023 (8) TMI 1299X X X X Extracts X X X X X X X X Extracts X X X X ..... s the transactions narrated in the application are in FTWG, which are warehouses governed under the provisions of SEZ Act, 2005 and not licensed under Customs Act, 1962. Therefore, the transactions in the FTWG will not be covered under Schedule III of CGST Act, 2017 read with CGST Amendment Act, 2018. Whether the Integrated Tax (IGST) Circular No. 3/1/2018 dated 25.05.2018 is applicable to the present factual situation? - HELD THAT:- Circular No. 03/01/2018 - IGST, dated 25th May 2018 has been rescinded vide Circular No. 04/01/2019 -IGST, dated 01.02.2019, in view of the amendment made in Schedule III of the CGST TNGST Act, 2017, by inserting Paragraph No. 8(a), so as to provide that the supply of warehoused goods to any person before clearance for home consumption shall be neither a supply of goods nor a supply of service. - SHRI R. GOPALSAMY, I.R.S., AND TMT N.USHA, MEMBER, 1. Any appeal against this Advance Ruling order shall be before the Tamil Nadu State Appellate Authority for Advance Ruling, Chennai as under Sub-Section (1) of Section 100 of CGST Act / TNGST Act 2017, within 30 days from the date on the ruling sought to be appealed is communicated. 2. In terms of Section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entities). The Applicant imports certain finished goods from its group entities. Haworth is a worldwide global leader in design and manufacture of organic workspaces, including raised floors, movable wells, systems furniture, seating, storage and lighting. 2.2. In India, the Applicant has manufacturing facility and sales office in the state of Tamil Nadu. Further, the applicant has sales office in Karnataka, Maharashtra, Haryana and Telangana. All operations of the Applicant are located in Domestic Tariff Area (DTA). The outward supplies effected by the Applicant in India includes: a. Sale of goods manufactured at the manufacturing facility; and b. Sale of goods imported from group entities. 2.3. The Applicant is contemplating to operate the import and re-sale transaction from a Free Trade Warehousing Zone (hereinafter referred to as FTWZ) for operational convenience involving less documentation and swift clearance process so as to expedite project execution. 2.4. The Applicant submits that FTWZ is a Special Economic Zone wherein trading, warehousing and other activities related thereto are carried out. An FTWZ is a deemed foreign territory within the geography of India for the pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cument and files BOE for re-warehousing (SEZ) / home consumption (others) and clears the goods from the FTWZ. At this juncture goods are removed from the warehouse and is taken to the premises of the Customer. The applicant has furnished below the diagrammatic representation of the flow of the transaction: 3.1. The applicant has made the following factual and legal submissions in relation to the questions for which advance ruling is sought: Question No .1 3.2. The Applicant submits that, the Schedule III of the CGST Act, 2017 r/w CGST Amendment Act, 2018 envisages transactions or activities which shall be treated neither as supply of goods nor as supply of services under GST. The Entry no. 8(a) of the schedule, covers supply of warehoused goods to any person before clearance for home consumption. Further, explanation to the entry provides that, warehoused goods shall have the same meaning as assigned to it in the Customs Act, 1962. 3.3. The Applicant submits that FTWZ is a special category of Special Economic Zone as per Section 2 (Za) of the SEZ Act, 2005, wherein mainly trading and warehousing and other activities related thereto are carried on. Both Customs bonded warehouse and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce from FTWZ. Hence, under the customs provision, the transaction is subjected to levy when goods are cleared from the FTWZ. Therefore, as clarified in the Circular No. 3/1/2018-IGST dated 25.05.2018, taxing the transaction before clearance does not arise for supply of warehoused goods, while being deposited in a FTWZ/ customs bonded warehouse. The Applicant is of the considered view that Circular No. 3/1/2018 - Integrated Tax (IGST) dated 25.05.2018 is applicable for the present transaction of transfer of title of warehoused goods and is of the view that supply of goods by the Applicant to customers subsequent transfers when the goods are still lying in the custom bonded warehouse or the FTWZ is outside the purview of GST as per Schedule III of the CGST Act, 2017 r/w CGST Amendment Act, 2018 and is not chargeable to tax under GST provisions till the goods are cleared for home consumption. 3.7. The Applicant has also placed reliance on the advance ruling pronounced by Tamil Nadu Advance Ruling Authority in the case of: a. The Bank of Nova Scotia - Order No. 23/ AAR/ 2018 dated 31.12.2018 b. Sadesa Commercial Offshore De Macau Limited - Order No. 24/ AAR/ 2018 dated 31.12.2018. 4.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of the applicant. 6. The Applicant has been offered personal hearing on 15.03.2023 through virtual mode and their Authorized representative Ms. R. Sukanya, Charted Accountant has attended the hearing and reiterated the submissions already made. 7.1. We have gone through the entire case records and submissions made by the applicant in their application and during personal hearing. 7.2. The basic point to be determined is that the admissibility of the application. In terms of Section 97 (2) of the GST Act, the question on which advance ruling is sought under the act shall be in respect of,- a) classification of any goods or services or both; b) applicability of a notification issued under the provisions of this Act; c) determination of time and value of supply of goods or services or both; d) admissibility of input tax credit of tax paid or deemed to have been paid; e) determination of liability to pay tax on any goods or services or both; f) whether the applicant is required to be registered; g) whether any particular thing done by the applicant with respect to any goods or services or both amounts to or results in a supply of goods or services or both, within the meanin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 1.- For the purposes of paragraph 2, the term court includes District Court, High Court and Supreme Court. Explanation 2.- For the purposes of paragraph 8, the expression warehoused goods shall have the same meaning as assigned to it in the Customs Act, 1962 (50 of 1962) [SI.No.7 and 8(a) and (b) are inserted by s. 32 of The Central Goods and Services Tax (Amendment) Act, 2018 (No. 31 of 2018) - Brought into force w.e.f. 01st February, 2019.] 7.4.2. From the above it can be seen that, as per paragraph 8(a) above, supply of warehoused goods to any person before clearance for home consumption is an activity/transaction which shall be treated neither a supply of goods nor a supply of services. As per the explanation 2 for the paragraph 8, the expression warehoused goods shall have the same meaning as assigned to it in the Customs Act, 1962. According to Section 2 (43) of Customs Act, 1962, Warehouse means a public warehouse licensed under Section 57 or a private Warehouse licensed under Section 58 or a special warehouse licensed under Section 58A of Customs Act, 1962. According to Section 9 (44) Warehoused goods means goods deposited in a warehouse . 7.4.3. Section 57, Section 58 a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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