No separate GST registration is required in the State where port of clearance is located- AAR Karnataka
by ReinHeads Team | Mar 26, 2020
No separate GST registration is required in the State where port of clearance is located– AAR Karnataka
| Facts |
- Kardex India Storage Solution Private Limited (‘the Applicant’) imports storage solutions from Germany and distributes the same to industrial customers across India
- The Applicant intends to import goods at the port nearest to the customer’s place and supply the same to customer’s location directly from the port of import. However, the applicant intends to issue the tax invoice for the said transaction from the registered place of business (located in a different State)
- The Applicant also uses the GSTIN obtained in the State of Karnataka (i.e. a State different from the port of import of goods) for the purpose of import of goods, filing of Bill of Entry and for payment of the IGST
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| Issue before the Authority on Advance Ruling (‘AAR’) |
- Whether the Applicant can take credit of integrated tax (‘IGST’) paid on import of goods?
- Whether the Applicant can issue tax invoice with IGST to the customer?
- Whether the Applicant needs to obtain GST registration in the State where the port of clearance is located?
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| Discussion and Ruling of the AAR |
- The Applicant is liable to pay IGST on goods imported into India under reverse charge basis in accordance with the provisions of Customs Act, 1962 and in terms of proviso to Section 5(1) of the Integrated Goods and Service Tax Act, 2017 (‘the IGST Act’)
- The goods imported by the Applicant are further supplied to various industrial customers in India which implies that the said goods are used in the course or furtherance of his business. Hence, the Applicant is entitled to claim the credit of IGST paid on imported goods
- The place of supply in case of import of goods is the location of the importer under Section 11(a) of the IGST Act
- In the instant case, location of the importer is the State of Karnataka where the Applicant has obtained the GST registration. Therefore, although the Applicant has imported the goods at the port nearest to the customer’s location, the said goods are deemed to have been supplied to the location of the importer (i.e., Karnataka) and thereafter supplied to the customer. Hence, the imported goods supplied directly from the port of import to the customer’s location in other States/ Union Territories (other than the State of Karnataka) shall be treated as an inter-state supply of goods under Section 7(1) of the IGST Act
- Therefore, the Applicant is liable to issue an IGST tax invoice in terms of Section 20 of the IGST Act
- The Applicant is already registered in the State of Karnataka, uses this GSTIN in the bill of entry for import of goods and also for payment of IGST on imported goods
- No provisions under the CGST or SGST or IGST Act 2017 mandates any person to obtain a GST registration again in the place of port of import where the Applicant undertakes custom clearance for further supply of goods
- Therefore, there is no requirement of obtaining a separate GST registration in the State where port of clearance is located, if the Applicant does not have an establishment in that State and effecting supplies from that location.
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