Same Rate Tax And Interest Applicable On IGST In Course Of Inter-State Trade And Supplies In Course Of Imports: CESTAT

While Additional duty of Customs gets credited to the Consolidated Fund of India and the divisible pool of tax revenues divided between the States and Union as per the recommendations of the Finance Commission, IGST does not get credited to the Consolidated Fund of India and gets divided between the State and Union as decided by the Parliament on the recommendations of the GST Council. Therefore, whatever rate of tax and interest apply to IGST in the course of inter-state trade also apply to supplies in the course of imports, added the bench.

In this case, the assessee had imported and cleared goods using 13 Advance Authorisations without paying basic customs duty, integrated goods and services tax on them. The DGRI found that assessee wrongly claimed exemption from IGST as such exemption was available to actual user condition which assessee did not fulfil. The assessee paid IGST on the imported consignments with interest.

The Commissioner of Customs stated that interest was payable on the IGST paid imported goods after a delay and the amount paid as interest was appropriated. Aggrieved by the decision of Commissioner of Customs, the assessee filed an Appeal before Commissioner (Appeals), who upheld the order of the Commissioner of Customs.

The assessee appealed against the final order before Rajasthan High Court, but the final order has not been stayed. The assessee has challenged the order passed by the Commissioner (Appeals) before the Tribunal.

The assessee contended that although it had paid IGST with delay, it was not liable to pay any interest on the ground that IGST is an Additional Duty of Customs, and the provisions of interest do not apply to Additional Duty of Customs. Further prayed that this appeal may be adjourned and taken up after the decision of the Rajasthan High Court.

Whereas it was contended by the department that since the matter has already been decided by this Tribunal and the order of this Tribunal still holds the field and it has not been stayed or set aside by any higher court, there is no reason to adjourn the matter.

The Tribunal noted that whatever is payable under the IGST Act on inter-state supplies within India is payable under section 3 of the Customs Tariff Act read with section 5 of the IGST Act if the supplies are in the course of importation.

The Tribunal stated that there is no reason to treat IGST paid on goods supplied in the course of international trade differently than the IGST paid on inter-state supply of goods. Therefore, whatever rate of tax and interest apply to IGST in the course of inter-state trade also apply to supplies in the course of imports.

In view of the above, the Tribunal allowed the appeal and remitted the matter to Commissioner for determining the interest applicable to IGST.

Counsel for Appellant/ Assessee: Yash Dhaddha

Counsel for Respondent/ Department: Rajesh Singh

Case Title: M/s JLC Electromet Private Limited Versus Commissioner, Customs, Jodhpur, Headquarters Jaipur

Case Number: Customs Appeal No. 51722 OF 2022

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