“Exporters have been facing a lot of hardship in terms of the working capital issue for which advance authorisation matters had initially gone to Delhi High Court. This is the second round of battle for the pre-import where in the Supreme Court
will decide whether the decision of the Gujarat High Court
in favour of the exporters is per incuriam”, said Abhishek A Rastogi, advocate for the petitioners.
In October 2017, the Central Board of Indirect Taxes & Custom (CBIC) issued a notification that set certain pre-requisite conditions for exporters who imported input goods after their finished products are exported.
The conditions imposed had the importers up in arms as the pre-GST period had the concept of advance authorisation licence that allowed an exporter to import raw materials used for manufacturing exported goods without payment of taxes on import of raw material used for past exports. After the introduction of GST, the government had amended the clause to say that exemption on Integrated GST (IGST), applicable on inter-state transactions, were to be denied to imports which had taken place after exports.