GST applicability on Goods imported, bonded and sold while in the Bonded Warehouse and clearance thereof  

The CBIC issued a circular 03/2018 dt 25th May ’18 to clarify  that IGST will be levied and collected only at the time of final clearance of warehoused goods for home consumption. Meaning, it will now be imposed at the time of filing the ex-bond bill of entry.

The transaction of sale / transfer etc. of the warehoused goods between the importer and any other person shall be treated as “supply” as per Sec 7 of the CGST ACT,2017.

When goods deposited in a customs bonded warehouse and are transferred by the importer to another person, the transaction will be subject to payment of IGST at the value determined as per section 20 of the IGST Act read with section 15 of the CGST Act, 2017 and the rules made thereunder and the tax liability shall be reckoned as per section 9 of the CGST Act, 2017.

The supply of goods before their clearance from the warehouse would not be subject to the levy of integrated tax and the same would be levied and collected only when the warehoused goods are cleared for home consumption from the customs bonded warehouse.

The Buyer shall file Bill of Entry for home consumption giving therein complete description of the goods and/or service namely, make and model number and serial number and specification along with invoice and packing list. Duties of customs (BCD + IGST) shall be paid on the imported goods at the stage of ex-bonding on the value determined under section 14 of the Customs Act.