Circular No 04/01/2019 IGST
F. No. CBEC-20/16/04/2018 – GST
Government of India Ministry of Finance
Department of Revenue Central Board of Indirect Taxes and Customs
GST Policy Wing

New Delhi, Dated the 1 st February, 2019

To,

The Principal Chief Commissioners / The Principal Directors General / Chief Commissioners / Directors General (All) / Principal Commissioners / Commissioners of Central Tax (All)

Madam/Sir,

Subject: Rescinding of Circulars issued earlier under the IGST Act, 2017 to be effective from 01.02.2019 – Reg.

The provisions of the CGST (Amendment) Act, 2018 and SGST Amendment Acts of the respective States have been brought into force w.e.f. 01.02.2019. Schedule III of the CGST Act, 2017 has been amended vide section 32 of the CGST (Amendment) Act, 2018 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 services.

2. Accordingly, Circular No. 03/01/2018-IGST dated 25th May, 2018 is hereby rescinded.

3. It is requested that suitable trade notices may be issued to publicize the contents of this circular.

4. Difficulty, if any, in implementation of this Circular may please be brought to the notice of the Board. Hindi version would follow.

(Upender Gupta)

Pr. Commissioner (GST)

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Summary of Circular No 3/1/2018 IGST

Applicability of Integrated Goods and Services Tax (integrated tax) on goods supplied while being deposited in a customs bonded warehouse-reg via Circular No 3/1/2018 IGST Dated  25th May, 2018 . This circular rescinded by Circular No 04/01/2019 IGST dated 01.02.2019 : No GST on supply of warehoused goods before consumption

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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 goods
supplied while being deposited in a customs bonded warehouse-reg

Attention is invited to Circular No. 46/2017-Customs dated 24.11.2017 whereby the
applicability 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 has
now been re-examined by the Board.

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

4. It may be noted that as per sub-section (2) of section 7 of the Integrated Goods and Services Tax Act, 2017  (hereinafter referred to as the “IGST Act”), the supply of goods  imported into the territory of India, till they cross the customs frontiers of India, is treated as  a 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 the  Customs Tariff Act, 1975 (hereinafter referred to as the “CTA”). Thus, in case of supply of  the warehoused goods, the point of levy would be the point at which the duty is collected  under 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.

5. It may also be noted that sub-section (8A) has been inserted in section 3 of the CTA
vide section 102 of the Finance Act, 2018,with effect from 31st March, 2018,so as to provide
that the valuation for the purpose of levy of integrated tax on warehoused imported goods at
the time of clearance for home consumption would be either the transaction value or the
value 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 of
final clearance of the warehoused goods for home consumption i.e., at the time of filing the
ex-bond bill of entry and the value addition accruing at each stage of supply shall form part
of the value on which the integrated tax would be payable at the time of clearance of the
warehoused goods for home consumption. In other words, the supply of goods before their
clearance 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 home
consumption from the customs bonded warehouse.

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

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

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

(Upender Gupta)
Commissioner (GST)

Download Circular No 3/1/2018 IGST  : Click here

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Clarification on Inter-state movement of various modes of conveyance, carrying goods or passengers or for repairs and maintenance- regarding vide Circular No. 1/1/2017-IGST Dated 7th of July, 2017

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, including

i. Trains,
ii. Buses,
iii. Trucks,

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)

Download PDF File of Circular

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