In re Murata Electronics (India) Private Limited (GST AAR Tamilnadu)
In the case of In re Murata Electronics (India) Private Limited, Advance Ruling No. 18/ARA/2024, the Authority for Advance Ruling (AAR) in Tamil Nadu received a request from Murata Electronics to clarify whether the Integrated Goods and Services Tax (IGST) is applicable on the sale of goods warehoused in a Free Trade and Warehousing Zone (FTWZ) to customers in India, prior to their clearance for home consumption. Murata Electronics, a subsidiary of Murata Electronics Singapore, imports electronic components to sell in India. Upon importation, the goods are stored at an FTWZ facility operated by Timescan Logistics, where no manufacturing or processing occurs. The sales process involves raising invoices and having customers clear the goods by filing a bill of entry for home consumption after customs duty is paid.
The applicant contended that according to Section 7(2) of the IGST Act, the supply of imported goods is considered an interstate supply until they cross customs frontiers, with the applicable customs duties being levied at the time of clearance. Murata Electronics argued that the sale of goods from the FTWZ facility to customers before customs clearance falls under entry 8(a) of Schedule III of the CGST Act, which classifies such transactions as neither a supply of goods nor services. Consequently, they believed that IGST should not be levied on these transactions in addition to the customs duties already applicable. However, the applicant decided to withdraw their application for advance ruling on this matter, stating that the determination process for the questions raised was unnecessary. The AAR accepted their request to withdraw without providing a ruling on the merits of the case.
