Case tittle | Jindal Dyechem Industries (P) Ltd. VS Union of India |
Court | Delhi High Court |
Honourable Judge | Justice S. Ravindra Bhat Justice A. K. Chawla |
Citation | 2018 (04) GSTPanacea 44 HC Delhi W.P.(C) 8677/2017 And CM APPL.35637/2017 |
Judgment Date | 16-April-2018 |
The petitioner has a grievance regarding the respondents’ refusal to grant an exemption from customs duties for goods imported solely to fulfill export obligations. The petitioner was issued advance authorizations under the Foreign Trade Policy 2015-20 and argues that the prevailing exemptions under customs notifications should not have been denied due to the introduction of a new levy under the Goods and Service Tax (GST) effective from July 1, 2017. The Court, while entertaining the proceedings, made an interim order on October 11, 2017, where Mr. Sanjeev Narula, the learned CGSC, accepted the notice on behalf of the respondents.
On October 6, 2017, the GST Council announced several measures aimed at addressing issues and easing the compliance burden under the Goods and Services Tax (GST) regime. Despite these announcements, the practical situation on the ground remains unchanged for some taxpayers. One such instance involves a Petitioner who imported gold bars from Abu Dhabi.
The Petitioner presented an e-challan in court, demonstrating the payment of Integrated Goods and Services Tax (IGST) amounting to Rs. 58,58,345/- for the Bill of Entry dated October 10, 2017. The Petitioner argued that he was compelled to pay this IGST in order to clear the imported goods, despite protesting to the authorities. The authorities did not entertain his protest, effectively leaving the Petitioner with no alternative but to make the payment to release his goods. This case highlights ongoing issues and the disconnect between policy announcements and their implementation on the ground.
On 6th October 2017, the GST Council announced several measures. However, the situation on the ground has remained unchanged. In court, the Petitioner presented an e-challan showing that they had paid Rs. 58,58,345/- as Integrated Goods and Services Tax (IGST) for a Bill of Entry dated 10th October 2017 for importing gold bars from Abu Dhabi. Despite this payment, the Petitioner was not allowed to clear the goods, and their protest to the authorities was ignored.
The Court has directed the Petitioner to submit these details in an affidavit within three days, providing an advance copy to Mr. Narula, who will seek instructions before the next hearing date.
In the meantime, the Court ordered that, based on the press release from 6th October 2017—which does not distinguish between Advance Authorisations (AA) issued before or after 1st July 2017—the Petitioner will not be required to pay IGST for future imports of gold bars under the AAs issued to them.
On October 6, 2017, the GST Council made several significant announcements aimed at addressing issues related to the Goods and Services Tax (GST) regime in India. These measures included adjustments to tax rates across various goods and services, as well as procedural changes to ease compliance and administration.
However, despite these announcements, the situation regarding tax payments on imports remained contentious. Specifically, on October 13, 2017, following a press release or notice dated October 6, 2017, the respondent (likely referring to the GST authorities or customs department) extended exemptions that were previously applicable to Integrated Goods and Service Tax (IGST) levies. This extension was presumably intended to clarify or modify the earlier provisions related to the payment of IGST on imports.
In a specific legal case, a petitioner had imported gold bars from Abu Dhabi on October 10, 2017, and had paid IGST amounting to Rs. 58,58,345. Despite their payment, the petitioner encountered difficulties in clearing the goods, leading to legal proceedings. The petitioner argued that as per the October 6, 2017 press release, no IGST should have been payable for such imports under the relevant Advance Authorisations (AAs), irrespective of whether these authorisations were issued before or after July 1, 2017.
As a result of the ongoing legal proceedings, the court directed the petitioner to submit an affidavit detailing their case within three days. It also granted interim relief to the petitioner, stating that pending the final outcome of the case, the petitioner would not be required to pay IGST on imports of gold bars covered under the AAs issued to them. This relief was contingent upon the petitioner providing an undertaking to the authorities and subject to verification by the Customs Department.
The matter was scheduled for further hearing on November 28, 2017, indicating that the legal process was ongoing to resolve the issues arising from the GST Council’s announcements and subsequent administrative actions regarding IGST on imports.
On October 6, 2017, the GST Council made several significant announcements aimed at streamlining and clarifying tax measures under the new Goods and Services Tax (GST) regime in India. These measures were intended to address various concerns and issues faced by businesses and taxpayers.
However, despite these announcements, the situation remained unchanged on the ground for many, including the petitioner in a legal case. The petitioner had imported gold bars from Abu Dhabi and paid Integrated Goods and Service Tax (IGST) amounting to Rs. 58,58,345/- for a Bill of Entry dated October 10, 2017. The petitioner’s attempts to contest this payment with authorities were unsuccessful.
In response to the petitioner’s plea, the court directed them to file an affidavit within three days detailing their payment of IGST and related circumstances. Meanwhile, the court acknowledged a press release from October 6, 2017, which suggested that Advance Authorisations (AA) issued before or after July 1, 2017, might not distinguish in terms of IGST payments. As an interim measure, the court ruled that the petitioner should not be required to pay IGST for imported gold bars under their AAs, provided they furnish a letter of undertaking and subject the goods to customs verification.
Additionally, on October 13, 2017, the respondent (authorities) extended the benefit of exemption notifications concerning IGST, though these had not been included in amended customs notifications from June 29, 2017. The imports under question in the case were made after the introduction of the GST regime, despite the petitioner holding an AA issued on July 17, 2017, which preceded the relevant exemption notifications.
Recognizing the complexities involved, the court opined that the respondent authorities should verify whether the petitioner fulfilled export obligations per the AA issued on July 18, 2017. If so, no further action was necessary; however, if obligations were not met, the authorities were to proceed with assessment in accordance with the law. The court mandated that these proceedings, including verification and any subsequent orders, should be completed within four months, ensuring the petitioner received due notice and opportunity to respond.
In summary, despite announcements by the GST Council in October 2017 to clarify tax measures, including exemptions under IGST, the practical application and disputes surrounding these measures continued to require adjudication in courts, as demonstrated by the petitioner’s case concerning imported gold bars and their IGST obligations under Advance Authorisations.
On October 6, 2017, the GST Council made several significant announcements aimed at addressing issues related to the Goods and Services Tax (GST) regime. These measures were intended to streamline processes and alleviate concerns among taxpayers and importers.
However, despite these announcements, the situation faced by the petitioner in a specific case remained unchanged. The petitioner had imported gold bars from Abu Dhabi under a Bill of Entry dated October 10, 2017. The petitioner had paid IGST amounting to Rs. 58,58,345/- as evidenced by an e-challan, without which the goods couldn’t be cleared. Despite protesting to the authorities, the petitioner’s efforts were unsuccessful.
In response, the Court directed the petitioner to file an affidavit within three days, detailing these facts. The Court noted a press release dated October 6, 2017, which appeared not to differentiate between Advance Authorisations (AA) issued before or after July 1, 2017. As per the interim relief granted, the petitioner was exempted from paying IGST on future imports of gold bars under AAs, provided they furnish a letter of undertaking and subject to Customs Department verification.
Additionally, it was highlighted that subsequent to the press release of October 6, 2017, the respondent extended exemption benefits under IGST to imports, which were not covered by the amended customs notifications issued on June 29, 2017. Importantly, the imports under scrutiny in the petition occurred after the GST regime’s implementation, although the petitioner had received an advance license on July 17, 2017, prior to the amendment of customs notifications.
The Court concluded that since the benefit of exemption existed at the time of the petitioner’s import, authorities should verify whether the petitioner fulfilled export obligations under the advance license. If verified, no further action would be necessary; otherwise, appropriate legal assessment should ensue. The respondent was directed to complete verification and any subsequent actions within four months, ensuring due process for the petitioner.
Ultimately, the writ petition and related applications were disposed of in accordance with the above terms, providing clarity and procedural directives in light of the GST Council’s announcements and subsequent developments.
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