Court affirms that IGST assessment on imports is the domain of customs authorities, invalidating State GST actions
In a landmark judgment, the Andhra Pradesh High Court has ruled that the State GST authorities do not have the jurisdiction to assess and collect Integrated Goods and Services Tax (IGST) on goods imported into India. The judgment was delivered in the case of Avanti Feeds Limited v. Deputy Commissioner of State Tax, where the court upheld that such jurisdiction lies solely with the customs authorities under the Customs Act.
The case arose when the Deputy Commissioner of State Tax issued a show cause notice to Avanti Feeds Limited, challenging their claims for IGST exemption on certain imported goods. The petitioner contended that as they were allocated to the Central Jurisdiction, the State GST authorities had no right to initiate proceedings against them.
The court, presided over by Justices R. Raghunandan Rao and T.C.D. Sekhar, found merit in the petitioner's argument. The judgment clarified that according to the IGST Act and the Customs Act, the assessment and collection of IGST on imported goods must be conducted by customs authorities. The court further noted that cross-empowerment provisions under the GST Acts do not apply when the taxpayer is under Central Government jurisdiction.
Additionally, the court struck down the Circular No. 80/54/2018-GST, which imposed conditions not envisaged in the exemption notification under Section 6(1) of the IGST Act. The court reiterated that once a High Court strikes down such a circular, it becomes inoperative across India.
In conclusion, the court set aside the show cause notice issued by the State GST authorities as invalid, emphasizing that any reassessment must be conducted under the appropriate jurisdiction if required.
Bottom Line:
GST Law - State GST authorities cannot initiate proceedings for IGST assessment on imported goods as jurisdiction to assess and collect IGST on such goods lies solely with customs authorities under the Customs Act. Cross-empowerment provisions under GST Acts are not applicable when the taxpayer is administratively allotted to the Central Government.
Statutory provision(s): Integrated Goods and Services Tax Act, 2017, Sections 5, 6; Customs Act, 1962, Sections 2(2), 28; Circular No. 80/54/2018-GST
