In re M/s. Khaitan Chemicals and Fertilizers Ltd. (GST AAR Gujarat)
We, therefore, find that the applicant has not paid the fees of Rs.10,000/- under the proper head i.e. ‘CGST’ and ‘GGST’ as required under the provisions of aforementioned Sections and Rules where as paid fees of Rs. 10,000/- under “IGST” head. Therefore, the instant application is liable for rejection under Section 98(2) of the CGST Act, 2017 for not paying the total fees of Rs. 10000/- i.e. under each head CGST & GGST as required under the provisions of CGST Act and Rules and respective GGST Act & Rules.
In view of the facts mentioned above, we do not find it necessary to delve into the details or facts of the issue in hand since the applicant has failed to comply even with the statutory requirements of the provisions of the relevant sections and rules of the CGST Act, 2017/CGST Rule, 2017 as well as the GGST Act, 2017/GGST Rules, 2017 with regard to filing the application of Advance Ruling before the Advance Ruling Authority, thus rendering it an invalid application for Advance Ruling under Section 97(1) of the CGST Act, 2017 read with Rule 104 of the CGST Rules, 2017.
FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING, GUJARAT
BRIEF FACTS
The applicant M/s. Khaitan Chemical & Fertilizer Ltd. submitted that they are mainly engaged in the manufacture of Single Super Phosphate (Fertilizer), Sulphuric Acid (chemical). The major raw material Rock Phosphate is required for manufacturing for Single Super Phosphate (SSP) which is imported from various contries like Egypt, Jordan & Morocco and also procured locally within country. The company is registered under GST laws for payment of GST/IGST besides being paying the customs duty on import of Rock Phosphate.
2. The applicant submitted that Rock Phosphate and other material is imported only on CIF (Sum of Cost, Insurance & Freight) basis. In CIF basis purchases, the freight invoice is issued by the foreign shipping line to the foreign exporter. The importer (i.e. Khaitan Chemical & Fertilizers Ltd.) is concerned only with the purchase of goods and the supplies of rock phosphate are responsible for transportation of goods upto custom Frontier of India. The company neither have any invoice of ocean freight nor has any idea of payments nd the mount of ocean freight by the foreign exporter.
3. The applicant has referred the following provisions for levying IGST on imported goods and determination the value for calculation of IGST :
> Section 5(1) of the IGST Act, 2017 regarding applicability of payment of IGST
> Section 3(7) of the Customs Tariff Act, 1975 levying IGST on the imported goods on the value determined under Section 3(8).
> Section 3(8) of the Customs Tariff Act, 1975.
> Section 14 of the Customs Act, 1962
> Customs Vluation (Determination of Value of Imported goods) Rules, 2007
Accordingly, applicant submitted that with regards to the above Sections of various act, on imported goods, IGST shall be levied on the sum of CIF (Cost, Insurance & Freight) value of the goods and all duties of customs.
4. The applicant submitted that at the time of importation, pays customs duty on the CIF value of the goods (Rock Phosphate and other materials) imported. They also pays the Integrated tax (IGST) under the IGST Act, 2017 on the import material on the CIF value plus custom duty. The said CIF value is the sum of Cost, Insurance & Freight which implies that this value includes the value of the Ocean Freight.
5. The applicant submitted that they pays IGST on the freight component, known as Ocean Freight under Reverse Charge Mechanism on the 10% of the CIF value considering as Ocean Freight as provided deeming fiction in the Not. No. 08/2017-Integrated Tax (Rate), Corrigendum dated 30.06.2017 to the Not. No. 08/2017-Integrated Tax (Rate) and Not. No. 10/2017- Integrated Tax (Rate).
6. The applicant submitted that they are paying the IGST twice on the same amount. Firstly, IGST on the CIF value plus Custom duty and Secondly on the Ocean Freight which is 10% of the CIF value. In such circumstances, to levy and collect once again the Integrated Tax under the same Act on the supply amounts to be double taxation.
7. The applicant has asked the following question seeking Advance Ruling on the same:
“Double taxation on freight portion of imported goods-
