Analysis of Circular on tax payment on supply of goods being deposited in custom bonded warehouse.

In the recent Circular No. 91/10/2019-GST dated 18 February 2019, CBIC has clarified on the issues faced in common portal in case of Supply of goods while being deposited in custom bonded warehouse which was subject to payment of IGST for the period 1 July 2017 to 31 March 2018.

For the said period the common portal did not have the facility to enable the taxpayer to report payment of IGST, for such supplies especially where the supplier and the recipient were located in the same State or Union territory. Hence, taxpayers engaged in such supplies had reported the said supplies as intra-state supplies and discharged CGST & SGST instead of IGST.

To address this issue, as a one-time exception, suppliers who had paid CGST & SGST on the above supplies would be deemed to have complied with the provisions of law to the extent that payment of tax on such supplies is concerned subject to the condition that CGST & SGST paid is equal to amount of IGST on such supply.


The Government considering the appropriate compliance of tax payment by tax payer, though under a wrong head & acknowledging the system glitches in GST network, is a welcome move and might eliminate litigation.

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June 2021