The Delhi High Court has allowed private companies to import goods to manufacture products for export without paying the additional levy of the latest Integrated Goods and Services Tax (IGST). A bench of Justices S Muralidhar and Pratibha M Singh, in an interim direction, permitted petitioners DBS Bank Ltd India, Chemico Synthetics Ltd, India Glycols Ltd, Shree Renuka Sugars Ltd and Narendra Plastic Private Ltd to import goods constituting inputs for the fulfilment of its export orders placed before July 1, without paying the additional levy of IGST.
The bench also issued notice to the Centre and Central Board of Excise and Customs (CBEC) after it was alleged that despite the September 11 interim order of the court, Narendra Plastic was forced to pay IGST on clearances effected by it under the valid licenses issued prior to July 1.
The court sought counter affidavits on the pleas and said this order should be delivered to the CBEC forthwith for further communication to all the Commissionerates with clear direction that it should be complied with.
Advocate Abhishek A Rastogi, who was representing all the petitioners, had challenged levy of IGST. He said the development would certainly provide confidence to the exporters who are today struggling with various challenges.
While granting the interim order, the bench said, “companies will be permitted to clear the consignments of imports constituting inputs for the fulfilment of its export orders placed on it prior to July 1, 2017 without any additional levies, and subject to the quantity and value as specified in the advance authorisation licenses issued to it prior to July 1, 2017.”
The order said the interim direction was “further subject to the petitioner furnishing an undertaking by way of an affidavit … within one week to the effect that in the case of the petitioner ultimately not succeeding in this writ petition, or failing to fulfil its export obligations, it is liable to pay the entire IGST as was leviable, together with whatever interest as the court may determine at the time of final disposal of the petition.”
Narendra Plastic, which is into manufacturing and export of plastic products, had approached the court against a notification issued under the recent GST regime that levies an additional tax on imports made after July 1 this year.
The company claimed that it held export orders placed before July 1, for the fulfilment of which it has to undertake imports of inputs.
As per the Advance Authorisation Scheme (AAS) under the Foreign Trade Policy 2015-2020, exporter manufacturers were entitled to duty-free import of inputs which are physically incorporated in the export product.