Aditya Mody of Devashish Polymers said, “Hopefully, this should now benefit many players who were facing hardship due to this provision.”
Abhishek Rastogi, counsel for the petitioner and partner in Khaitan & Co, said the circular showed the government was actively taking steps to remove almost all issues raised before high courts through writ petitions.
Sources in the company said it was now likely to withdraw the petition from the high court, with the issue having been settled. However, the circular is effective from April 1 this year, raising doubts over tax issues prior to that date.
The 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, the Board said. The goods are then supplied 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.
According to provisions in the GST
laws, IGST would be levied and collected in accordance with the provisions of the Customs Tariff Act, the Board added.
Thus, in the case of supply of warehoused goods, the point of levy would be the point at which the duty is collected under Section 12 of the Customs Act, 1962, which is at the time of clearance of such goods.
The circular is effective from April 1 this year, raising doubts over the tax issues prior to that date.
Abhishek Jain, partner, EY, said, there were still ambiguity on supplies made prior to April.