Delhi High Court: Delhi HC gives exemption to an export company from paying IGST

Team SoOLEGAL 13 Sep 2017 12:30pm

Delhi High Court: Delhi HC gives exemption to an export company from paying IGST

Yesterday, The Delhi High Court allowed an export company to import certain goods used as inputs in manufacturing products, without paying the additional levy under the new included Goods and Services Tax.

Narendra Plastic Private Limited, which is in the business of manufacturing and exporting plastic products, approached the Court against a notification issued under the new GST regime that levied an additional tax on imports made after July 1, 2017.

Previous, an Advance Authorisation Scheme was made available to exporters like the petitioner, wherein they were entitled to the duty-free import of the input which was physically incorporated in the export product.

Khaitan & Co Partner Abhishek A Rastogi, appearing for the petitioner, submitted that the main grievance was that the company held export orders placed on it prior to July 1, 2017 for the fulfillment of which, it had to undertake import of inputs. Paying the additional levy of IGST on such imports would cause a working capital blockage.

The prospect of the IGST being ultimately refunded sometime in the future was also of little consolation to the petitioner, who sought liquidity to discharge the additional levy of IGST, failing which its imports will get blocked.

Further, Rastogi submitted that the limited relief sought by the petitioner is only in relation to the applicability of the additional tax to imports required for export orders placed prior to July 1, 2017. He also informed the Court about a representation made by the Commerce Ministry to the Ministry of Finance highlighting the quandary of exporters like the petitioner.

Senior Standing Counsel for the Customs Department Sanjeev Narula

Tagged: Delhi High Court   Goods and Services Tax   Justice S Muralidhar   Justice Pratibha M Singh  
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