ITC Can Be Availed on IGST Paid Both On Imports Intra & Inter-State Sales: AAR

The applicant, M/s. Euroflex Transmissions (India) Private Limited, wishes to supply imported goods directly from the port of importation to customers located throughout India, rather than bringing such goods to the applicant's registered premises in the State of Telangana and issuing a tax invoice from the Telangana location.

The applicant has sought an advance ruling on the issue of whether the applicant is required to obtain registration in the state in which goods are imported if the said goods are directly sold from the port of importation to the customers located across different states in India.

Yet another issue raised was whether the applicant is entitled to avail the input tax credit of IGST paid on the import of goods if the said goods are sold directly from the port of importation to the customers located across different states in India without bringing such goods into Telangana.

The AAR observed that transactions made by the applicant after clearing goods from customs in their own account are subsequent sales and not sales in the course of import, where customs clearance will be made by the purchaser, in which case the transactions will be covered under Entry 8 of Schedule III to the CGST Act, 2017. The subsequent sale, when made to a customer within the State of Telangana, will be an intra-state sale liable to CGST and SGST, and when such a sale is made to a customer in other states of the country, it will be an inter-state sale liable to IGST. Being a taxable sale, the person making such taxable sales is liable to register under the CGST Act, 2017. It is seen that the applicant has already obtained a registration. Therefore, the registration is sufficient to cover the transactions or supplies of the nature described by the applicant.

The applicant ruled that under Section 16 of the CGST Act, 2017 read with Section 20 of the IGST Act, the IGST paid on imports is eligible to be availed as an Input Tax Credit (ITC) both on intra-state and inter-state sales.

Applicant's Name: M/s. Euroflex Transmissions (India) Private Limited

Dated: 08.04.2022

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