The Telangana Authority of Advance Ruling (AAR) has ruled that IGST paid on imports is eligible to be availed as an Input Tax Credit (ITC) both on intra-state and inter-state sales.
The applicant, M/s. Euroflex Transmissions (India) Private Limited, approached the AAR in order to get a clarification on the supply of imported goods directly from the port of importation to customers located throughout India, rather than bringing such goods to the applicant’s registered premises in the State of Telangana and issuing a tax invoice from the Telangana location.
The applicant wanted to know whether they require a GST registration in the state in which goods are imported if the said goods are directly sold from the port of importation to the customers located across different states in India.
The AAR bench consisting of members B. Raghu Kiran and S.V. Kasi Visweswara Rao observed that transactions made by the applicant after clearing goods from customs in their own account are subsequent sales and not sales in the course of import, where customs clearance will be made by the purchaser, in which case the transactions will be covered under Entry 8 of Schedule III to the CGST Act, 2017.
“The subsequent sale, when made to a customer within the State of Telangana, will be an intra-state sale liable to CGST and SGST, and when such a sale is made to a customer in other states of the country, it will be an inter-state sale liable to IGST. Being a taxable sale, the person making such taxable sales is liable to register under the CGST Act, 2017. It is seen that the applicant has already obtained a registration. Therefore, the registration is sufficient to cover the transactions or supplies of the nature described by the applicant,” the AAR bench said.
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