GJEPC: Ex­hi­bi­tion Jew­ellery, Re­turn Con­sign­ments Ex­empted From IGST

Solitaire - - GJEPC NEWS -

The gems and jew­ellery in­dus­try breathed a col­lec­tive sigh of re­lief fol­low­ing an an­nounce­ment by the min­istry of fi­nance on July 22nd that the In­te­grated Goods and Ser­vices Tax (IGST) will not be levied on gems and jew­ellery taken out of In­dia for ex­hi­bi­tion pur­poses. The Direc­tor of Cus­toms vide Cir­cu­lar No. 21/2019 also clar­i­fied the ap­pli­ca­bil­ity of No­ti­fi­ca­tion No. 45/2017 - Cus­toms dated 30.06.2017 on goods which were ex­ported ear­lier for ex­hi­bi­tion pur­pose/con­sign­ment ba­sis.

The Gem & Jew­ellery Ex­port Pro­mo­tion Coun­cil (GJEPC) had made sev­eral rep­re­sen­ta­tions in this re­gard to the Min­istry of Fi­nance, Depart­ment of Rev­enue, and Cen­tral Board of In­di­rect Taxes & Cus­toms. To date, gems and jew­ellery car­ried out­side the coun­try for ex­hi­bi­tions and the un­sold con­sign­ments which were brought back to In­dia at­tracted IGST at the time of reim­port.

The state­ment from the Govern­ment of In­dia clar­i­fied that that the ac­tiv­ity of send­ing/tak­ing the goods out of In­dia for ex­hi­bi­tion or on con­sign­ment ba­sis for ex­port

pro­mo­tion do not con­sti­tute as sup­ply as the said ac­tiv­ity does not fall within the scope of sec­tion 7 of the CGST Act as there is no con­sid­er­a­tion at that point in time. Since such ac­tiv­ity is not a sup­ply, the same can­not be con­sid­ered as “zero-rated sup­ply” as per the pro­vi­sions con­tained in sec­tion 16 of the IGST Act.

GJEPC chair­man Pramod Agrawal said, “The Coun­cil is re­ally grate­ful to the Govern­ment of In­dia and the Cus­toms Depart­ment for the cir­cu­lar clar­i­fy­ing on re­lief of IGST on reim­port of goods af­ter ex­hi­bi­tion/ con­sign­ment. We are es­pe­cially thank­ful to union com­merce & in­dus­try min­is­ter Piyush Goel, union fi­nance min­is­ter Nir­mala Sithara­man, of­fi­cials of the union min­istry of com­merce & in­dus­try, union fi­nance min­istry, and Cus­toms au­thor­i­ties for their un­der­stand­ing and sup­port. Thank you all for the pa­tience shown as it will be a great re­lief to the gems and jew­ellery in­dus­try.

“The en­tire gem and jew­ellery in­dus­try is thank­ful to the Govern­ment of In­dia for com­ing up with this trade-friendly step, as this will fur­ther boost the pro­mo­tional ac­tiv­i­ties glob­ally. As the apex body of the in­dus­try, while mak­ing rep­re­sen­ta­tions we have not left any stone un­turned in our gen­uine ef­fort to­wards re­solv­ing this is­sue. The move will def­i­nitely pro­vide respite to our mem­ber ex­porters.”

The Cir­cu­lar also clar­i­fied that even in cases where ex­ports have been made to re­lated or dis­tinct per­sons or to prin­ci­pals or agents, as the case may be, for par­tic­i­pa­tion in ex­hi­bi­tion or on con­sign­ment ba­sis, but, such goods ex­ported are re­turned af­ter par­tic­i­pa­tion in ex­hi­bi­tion or the goods are re­turned by such con­signees with­out ap­proval or ac­cep­tance, as the case may be, the ba­sic re­quire­ment of ‘sup­ply’ as de­fined can­not be said to be met as there has been no ac­cep­tance of the goods by the con­signees. Hence, reim­port of such goods af­ter re­turn from such ex­hi­bi­tion or from such con­signees will be cov­ered by en­try at Se­rial no. 5 of the No­ti­fi­ca­tion No. 45/2017 dated 30.06.2017, pro­vided re-im­port hap­pens be­fore six months from the date of de­liv­ery chal­lan.

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