Import of Goods under Advance Authorisation

Import of Goods under Advance Authorisation

With the introduction of GST on 01 July 2017, all import of goods under Advance Authorisation was made subject to payment of IGST (DGFT GST FAQ). This has naturally resulted in cash outflow for exporters operating under duty exemption scheme. IGST so paid was entitled to Input Tax Credit. However, since exports are zero-rated, such credit was required to be taken back from Government as the refund. This has resulted into blockage of funds, as the refund was not forthcoming as promised.

GST council had reviewed the situation and decided to grant exemption from IGST which was subject to “Pre-import condition”. Based on this decision, DGFT had issued Notification No. 33 dated 13 October 2017 and the Customs Department has also issued Notification No.79 dated 13 October 2017. The validity of exemption was initially for a period of five and half months i.e. up to 31.03.2018. DGFT had further extended the benefit of exemption till 01 October 2018 vide Notification No. 54/2015-2020 dated 22 March 2018.

In terms of an article, the change in condition has led to the directorate of revenue intelligence (DRI) issuing notices to exporters. Importers had approached various courts over restrictions imposed for availing advance authorization licenses.  Orissa High Court has directed investigating authorities not to take coercive action against importers on the issue of availing advance authorization licenses under GST regime.