Case Law Details
In re Haworth India Private Limited (GST AAR Tamilnadu)
Summary: The case in focus revolves around the transfer of title of goods within the Free Trade Warehousing Zone (FTWZ). The pivotal question raised is whether such transfers fall within the ambit of Schedule III of the CGST Act, 2017, post its amendment in 2018. It has been determined that such transfers do not qualify under the mentioned schedule. Additionally, the relevance of Circular No. 3/1/2018 – Integrated Tax (IGST) dated 25.05.2018 has been mooted, as it has subsequently been rescinded. The rescindment comes in light of the amendment in Schedule III of the CGST Act, 2017, which specifically states that the ‘supply of warehoused goods to any person before clearance for home consumption’ neither classifies as a supply of goods nor a supply of service.
Introduction: In a crucial decision related to GST, the Authority for Advance Ruling (AAR) Tamilnadu analyzed Haworth India Pvt. Ltd.’s queries regarding the transfer of title of goods in FTWZ and the applicability of Integrated Tax (IGST) Circular No. 3/1/2018 – Integrated Tax (IGST) dated 25.05.2018.
Admissibility of the Application: The primary aspect to consider was whether the questions posed by Haworth India fall under Section 97(2) of the GST Act. This section defines the scope of questions on which advance rulings can be sought, including classification of goods/services, applicability of notifications, determination of tax liability, and more. In this case, the questions raised were indeed admissible.
Schedule III of the CGST Act, 2017 & CGST Amendment Act, 2018: Schedule III lists activities that are considered neither as a supply of goods nor services. The key focus here is on paragraph 8(a) that talks about the “supply of warehoused goods before clearance.” The interpretation of “warehoused goods” is directly linked to the Customs Act, 1962. This definition contrasts with the operations in the Free Trade Warehousing Zone (FTWZ), which operates under the SEZ Act, 2005, and not directly under the Customs Act, 1962.
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