As per Para 6.15 (b) of FTP, “no duty shall be payable other than the applicable taxes under GST
laws in case capital goods, raw material consumables, spares, goods manufactured, processed or packaged, and scrap/waste/remnants/rejects are destroyed within the unit after intimation to Customs authorities, or destroyed outside the unit with permission of Customs authorities”. Condition no.8 in the opening paragraph of notification 52/2003-Cus dated March 31, 2003 also makes a similar provision. However, this dispensation is not available for EOUs engaged in manufacture and export of gold, silver, platinum, diamond, precious and semi-precious stones.
The ad hoc exemption order no.4/2021-Cus dated May 3, 2021 exempts IGST only on goods imported free of charge for Covid relief. So, if you pay for the imported goods, exemption from IGST will not be available. Thus, GST
will be payable whether you buy from a party abroad or from a local supplier. When you donate (i.e. dispose of the imported or domestically procured goods by way of gifts), you cannot take ITC of the GST paid, due to restrictions under Section 17(5)(h) of the CGST Act, 2017.
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