Delhi HC exempts export company from paying IGST for import
NEW DELHI: The Delhi High Court has allowed a private company to import goods to manufacture products for export, without paying the additional levy of the latest Integrated Goods and Services Tax (IGST).
A bench of Justices S Muralidhar and Pratibha M Singh, in an interim direction, permitted the petitioner Narendra Plastic Private Ltd to import goods constituting inputs for the fulfilment of its export orders placed before July 1, without paying the additional levy of IGST.
"Export orders are usually placed several months in advance and the price fixed is not variable beyond a point. If an additional levy is imposed, after the acceptance of such export orders, the resultant burden cannot possibly be passed on by the exporter to the buyers outside India.
"This might lead to the cancellation of such export orders placing the exporter in a piquant situation," the bench observed.
The company, which is into manufacturing and export of plastic products, had moved the court against a notification issued under the recent GST regime that levies an additional tax on imports made after July 1 this year.
The company claimed that it holds export orders placed prior to July 1, for the fulfilment of which it has to undertake imports of inputs.
As per the Advance Authorisation Scheme (AAS) under the Foreign Trade Policy 2015-2020, exporter manufacturers were entitled to dutyfree import of inputs which are physically incorporated in the export product.
"The working of the AAS is such that, for the import of inputs made by exporter towards fulfilment of export orders, the credit of customs duty, as specified in the Advance Authorisation licenses issued to the exporter, is permitted to be availed of at the time of import," the court observed.
It said that the company will be "permitted to clear the consignments of imports constituting inputs for the fulfilment of its export orders placed on it prior to July 1, 2017 without any additional levies, and subject to the quantity and value as specified in the advance authorisation licenses issued to it prior to July 1, 2017."
The order said that interim direction is "further subject to the petitioner furnishing an undertaking by way of an affidavit filed in this court within one week to the effect that in the case of the petitioner ultimately not succeeding in this writ petition, or failing to fulfil its export obligations, it is liable to pay the entire IGST as was leviable, together with whatever interest as the court may determine at the time of final disposal of the petition." NEW DELHI: Taking forward the process for Air India divestment, the government on Thursday invited applications from investment bankers, law firms and other entities to act as advisers for strategic stake sale of the flag carrier.
The government has decided on strategic disinvestment of the loss-making Air India, which is staying afloat on taxpayers' funds, and a ministerial panel is working on the modalities.
Applications have been sought for engaging up to two advisers and a legal adviser for the "strategic disinvestment of Air India and its subsidiaries/ joint venture", according to two similarly-worded public notices issued by the Finance Ministry.
"The Government of India has in-principle decided to consider the disinvestment of the AI Group as a whole or its constituents fully or part thereof through strategic sale with transfer of management control," the notices said.
It is looking for reputed investment bankers, merchant bankers, financial institutions and banks for providing advisory services and managing the strategic disinvestment process.
The government "requires the services of reputed law firms with experience and expertise in mergers and acquisitions/ takeovers/strategic disinvestment/ private equity transaction to act as legal adviser and assist government in the process," one of the notices said.
Applications have to be submitted by October 12. The notices for Expression of Interest have been issued by the Department of Investment and Public Asset Management.
Under a turnaround plan approved by the previous UPA regime, Air India is to receive up to Rs 30,231 crore from the government subject to meeting certain performance thresholds.
The ten-year bailout package began from 2012. So far, the embattled carrier has received around Rs 26,000 crore under the package. The Cabinet Committee on Economic Affairs (CCEA) gave its in-principle nod for the strategic disinvestment of the airline in June this year.
Subsequently, an Air Indiaspecific alternative mechanism was set up to guide the process.
The ministerial group is looking into treatment of Air India's unsustainable debt, hiving off of certain assets to a shell company, demerger and strategic disinvestment of three profitmaking subsidiaries, among other aspects.