CIRCULAR NO-3/1/2018-IGST-F. No. CBEC/20/16/03/2017- GST-Applicability of Integrated Goods and Services Tax (integrated tax) on goods supplied while being deposited in a customs bonded warehouse-reg.

Circular No. 3/1/2018-IGST

F. No. CBEC/20/16/03/2017- GST
Government of India
Ministry of Finance
Department of Revenue
Central Board of Indirect Taxes and Customs
GST Policy Wing

New Delhi, Dated the 25th May, 2018

To,
The Principal Chief Commissioners/ Chief Commissioners/ Principal Commissioners/Commissioners of Central Tax (All)/

The Principal Directors General/ Directors General (All)

Madam/Sir,
Subject: Applicability of Integrated Goods and Services Tax (integrated tax) on goodssupplied while being deposited in a customs bonded warehouse-reg.

Attention is invited to Circular No. 46/2017-Customs dated 24.11.2017 whereby theapplicability of integrated tax on goods transferred/sold while being deposited in a warehouse(hereinafter referred to as the “warehoused goods”) was clarified.

2. Various references had been received by the Board on the captioned issue which hasnow been re-examined by the Board.

3. It is seen that the “transfer/sale of goods while being deposited in a customs bondedwarehouse” is a common trade practice whereby the importer files an into-bond bill of entryand stores the goods in a customs bonded warehouse and thereafter, supplies such goods toanother person who then files an ex-bond bill of entry for clearing the said goods from thecustoms bonded warehouse for home consumption.

4. It may be noted that as per sub-section (2) of section 7 of the Integrated Goods andServices Tax Act, 2017 (hereinafter referred to as the “IGST Act”), the supply of goodsimported into the territory of India, till they cross the customs frontiers of India, is treated asa supply of goods in the course of inter-State trade or commerce. Further, the proviso to subsection (1) of section 5 of the IGST Act provides that the integrated tax on goods imported
into India would be levied and collected in accordance with the provisions of section 3 of theCustoms Tariff Act, 1975 (hereinafter referred to as the “CTA”). Thus, in case of supply ofthe warehoused goods, the point of levy would be the point at which the duty is collectedunder section 12 of the Customs Act, 1962 (hereinafter referred to as the “Customs Act”)which is at the time of clearance of such goods under section 68 of the Customs Act.

Circular No. 3/1/2018-IGST

5. It may also be noted that sub-section (8A) has been inserted in section 3 of the CTAvide section 102 of the Finance Act, 2018,with effect from 31st March, 2018,so as to providethat the valuation for the purpose of levy of integrated tax on warehoused imported goods atthe time of clearance for home consumption would be either the transaction value or thevalue as per sub-section (8) of section 3 of the CTA (i.e. valuation done at the time of filing
the into-bond bill of entry), whichever is higher.

6. It is therefore, clarified that integrated tax shall be levied and collected at the time offinal clearance of the warehoused goods for home consumption i.e., at the time of filing theex-bond bill of entry and the value addition accruing at each stage of supply shall form partof the value on which the integrated tax would be payable at the time of clearance of thewarehoused goods for home consumption. In other words, the supply of goods before theirclearance 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 homeconsumption from the customs bonded warehouse.

7. This Circular would be applicable for supply of warehoused goods, while beingdeposited in a customs bonded warehouse, on or after the 1
stof April, 2018.

8. It is requested that suitable trade notices may be issued to publicize the contents ofthis Circular.

9. Difficulty, if any, in implementation of the above instructions may please be broughtto the notice of the Board. Hindi version would follow.

(Upender Gupta)
Commissioner (GST)

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CIRCULAR NO-2/1/2017-IGST-Clarification on supply of satellite launch services by ANTRIX Corporation Ltd

Circular No. 2/1/2017-IGST

F. No. 354/173/2017-TRU
Government of India
Ministry of Finance
Department of Revenue
Tax research Unit
****

North Block, New Delhi27th September 2017

To,

The Principal Chief Commissioners/Chief Commissioners/ Principal Commissioners/Commissioner of Central Tax (All) /

The Principal Director Generals/ Director Generals (All)

Madam/Sir,

Subject: Clarification on supply of satellite launch services by ANTRIX Corporation Ltd -regarding.

Request has been received regarding taxability of satellite launch services provided toboth international and domestic customers by ANTRIX Corporation Limitedwhich is awholly owned Government of India Company under the administrative control of Departmentof Space (DOS).

2. In the above context, the legal provisions in GST laws are as under:

a) Export of services is defined in IGST Act in Section 2(6) where the following 5conditions have been prescribed as necessary for a supply to qualify as export of service:

(i) the supplier of service is located in India;
(ii) the recipient of service is located outside India;
(iii) the place of supply of service is outside India;
(iv) the payment for such service has been received by the supplier of service in
convertible foreign exchange; and
(v) the supplier of service and the recipient of service are not merely establishmentsof a distinct person in accordance with Explanation 1 in section 8;One of the five conditions for a supply of service to be considered as “export of service”is that the place of supply of service is outside India.

b) Section 13(9) of the IGST Act provides that where location of supplier of services orlocation of recipient of services is outside India, the place of supply of services oftransportation of goods, other than by way of mail or courier, shall be the place ofdestination of such goods. However, where location of supplier and recipient of servicesis in India, then the place of supply is governed by section 12 (8) of the IGST Act, whichstipulates that place of supply will be the location of the recipient of services provided

Circular No. 2/1/2017-IGST

he is registered; if not registered, then the place of supply will be the place where goodsare handed over for their transportation.

3. In view of the above, place of supply of satellite launch services supplied by ANTRIXCorporation Limited to international customers would be outside India in terms of section13(9) of IGST Act, 2017 and such supply which meets the requirements of section 2(6) ofIGST Act, thus constitutes export of service and shall be zero rated in accordance with section16 of the IGST Act. Where satellite launch service is provided by ANTRIX CorporationLimited to a person located in India, the place of supply of satellite launch service would be
governed by section 12 (8) of the IGST Act and would be taxable under CGST Act, UTGSAct or IGST Act, as the case may be.

4. Difficulty if any, in the implementation of the circular should be brought to the noticeof the Board. Hindi version would follow.

Yours Faithfully,

Rachna
Technical Officer (TRU)

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Circular No. – 1/1/2017-IGST – F.No.354/119/2017–TRU(Pt) – Clarification on Inter-state movement of various modes of conveyance, carrying goods or passengers or for repairs and maintenance- regarding

Circular No. 1/1/2017-IGST
F. No. 354/119/2017 –TRU (Pt)
Government of India
Ministry of Finance
Department of Revenue
Tax Research Unit

North Block, New Delhi
Dated the 7th of July, 2017

To,
The Principal Chief Commissioner/Chief Commissioners/ Principal Commissioner/
Commissioner of Central Tax (All) / Director General of Systems

Subject: Clarification on Inter-state movement of various modes of conveyance, carrying goods or passengers or for repairs and maintenance- regarding.

The issue relating to levy of IGST exemption on inter-state movement of various modes of conveyance, carrying goods or passengers or for repairs and maintenance, between distinct persons as specified in section 25(4) of the Central Goods and Services Tax Act, 2017,
carrying goods or passengers or both; or for repairs and maintenance, [except in cases where such movement is for further supply of the same conveyance] has been examined.
2. In the above context, the legal provisions in GST laws are as under:
a) As per section 24 (1) (i) of the Central Goods and Services Tax Act, 2017, persons making any inter-State taxable supply shall be required to be registered under this Act.
b) As per section 25(4) of the said Act a person who has obtained or is required to obtain more than one registration, whether in one State or Union territory or more than one State or Union territory shall, in respect of each such registration, be treated as distinct persons for the purposes of this Act.

c) Schedule I to the said Act specifies situations where activities are to be treated as supply even if made without consideration which also includes supply of goods or services or both between related persons or between distinct persons as specified in section 25, when made in the course or furtherance of business

d) Section 7 (2) envisages that activities or transactions undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities, as may be notified by the Government on the recommendations of the Council, shall be treated neither as a supply of goods nor a supply of services.

3. Against the above background, the issue of inter-state movement of goods like movement of various modes of conveyance, between distinct persons as specified in section 25
(4) of the said Act, not involving further supply of such conveyance, includingi. Trains,
ii. Buses,
iii. Trucks,

Circular No. 1/1/2017-IGST

iv. Tankers,
v. Trailers,
vi. Vessels,
vii. Containers,
viii. Aircrafts,

(a) carrying goods or passengers or both; or (b) for repairs and maintenance, [except in cases where such movement is for further supply of the same conveyance] was discussed in GST Council’s meeting held on 11th June, 2017 and the Council recommended that such inter-state movement shall be treated ‘neither as a supply of goods or supply of service’ and therefore
not be leviable to IGST.

4. In view of above, it is hereby clarified that “the inter-state movement of goods like movement of various modes of conveyance, between distinct persons as specified in section 25(4) of the Central Goods and Services Tax Act, 2017, including the ones specified at (i) to (viii) of para 3, may not be treated as supply and consequently IGST will not be payable on
such supply.

5. However, applicable CGST/SGST/IGST, as the case may be, shall be leviable on repairs and maintenance done for such conveyance.

(Ruch Bisht.)
Under Secretary (TRU)

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