Important definition of IGST ACT-
Sec 2(10) “Import of goods” with its grammatical variations and cognate expressions, means bringing goods into India from a place outside India;
“Customs frontiers of India” means the limits of the area of a customs station as defined in section 2 of the Customs Act, 1962 (52 of 1962) in which imported goods are ordinarily kept before clearance by customs authorities;
Sec 7(2) ;-Supply of goods in the course of import into the territory of India till they cross the customs frontiers of India shall be deemed to be a supply of goods in the course of inter-State trade or commerce.
Sec 5 of IGST ACT, 2017– IGST on goods imported into India shall be levied and collected in accordance to sec 3 of custom tariff act, 1975 on the value as determine under said act at the point when duty of custom levied on said goods u/s 12 of custom act 1962.
Sec 2 (26) of Custom ACT “Importer” in relation to any goods at any time between their importation and time when they are cleared for home consumption, includes any owner or Any person holding himself out to be an importer.
Place of supply of goods imported into India.
The place of supply of goods, imported into India shall be the location of the importer; Sec 11 of IGST.
High Sea Sale:-
When we read sec 7(2) and sec 5 of IGST, we can conclude that levy of IGST on imported goods comes when you clear the goods for home consumption therefore high sea sale not be liable for GST.
Mr.A registered person of Delhi has import goods from US and sale the goods by transfer of B/L before clearance of goods from Gujarat port to Mr.B.
Ans;-Mr B is treated as importer as per definition of sec 2(26) of custom Act. He has to pay IGST on clearance of goods from Custom.
Supply from Port after clearance of goods;-
According to Supreme Court decision in case of Garden Silk Mills 2002-SC when you file B/E import is completed, the goods become the part of mass of the country.
Mr.A registered person of Delhi has import goods from US and cleared goods from Gujarat port by Paying IGST. Now he has found a buyer in Gujarat. Now He wants to supply goods from Gujarat port without receiving the goods at Delhi.
Question-Whether you are eligible for input credit without received the goods at Delhi.
Sec 16 (2) of CGST ACT deal with the credit availability. No registered person shall be entitled to the credit of any input tax in respect of any supply of goods or services or both to him unless,
(a) he is in possession of a tax invoice or debit note issued by a supplier registered under this Act, or such other tax paying documents as may be prescribed;
(b) he has received the goods or services or both.
Explanation.—For the purposes of this clause, it shall be deemed that the registered person has received the goods where the goods are delivered by the supplier to a recipient or any other person on the direction of such registered person, whether acting as an agent or otherwise, before or during movement of goods, either by way of transfer of documents of title to goods or otherwise;
Key point of explanation;-
i. It shall be deemed that the registered person (Mr.A) has received the goods
ii. where the goods are delivered by the supplier (Mr.S) to a recipient or any other person (Mr.Y)
iii. on the direction of such registered person (Mr.A)
iv. before or during movement of goods, either by way of transfer of documents of title to goods or otherwise;
Ans. When we read explanation it is clear that goods shall be deemed to be received only when these are delivered by supplier to recipient on the direction of registered person.
Where we received the goods at port then provision of this clause shall not apply as the goods are not supplied by the supplier. So you have to receive the goods for taking the credit or register yourself at the place from where you want to supply the goods without receiving the goods.
Conclusion: In case of import credit cannot be availed unless goods are received by registered person in the registered state or you have to take registration in the state from where you are willing to supply directly without receiving the goods to registered place of business.