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Advance authorisation - Removal of pre-import condition for IGST exemption


11th January

Pre-import condition to avail exemption from IGST and Compensation Cess for imports under Advance Authorisation has been removed.

CBIC Notification 01/2019-Cus., dated 10-01-2019 in this regard amends Notifications Nos. 18/2015-Cus. and 20/2015-Cus., where an additional condition has however been inserted in respect of imports made after discharge of export obligation in case IGST exemption is availed.

As per the new additional conditions, in case of imports after discharge of EO in full, if IGST exemption is claimed and if the facility of Input Tax Credit (ITC) has been availed in respect of inputs used for manufacture and supply of goods exported, then the importer needs to furnish a bond, binding himself to use the imported material in his factory or in the factory of his supporting manufacturer. Additionally, the importer is required to submit a certificate from a chartered accountant certifying that the inputs have been so used.

Further, export obligation is such cases (case of IGST and Cess exemption) can now also be fulfilled by certain specified domestic supplies in addition to physical exports. According to the amendments, domestic supplies mentioned at Sl. No. 1, 2 and 3 of Notification No. 48/2017-Central Tax (relating to deemed exports) would also be eligible for fulfilling export obligation in such cases.

Suitable amendments have also been made in Para 4.14 of the Foreign Trade Policy 2015-20 for this purpose.

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