Indirect Tax Alert - Clarification in respect of pre-import conditions under the Advance Authorizati

After the Hon’ble Supreme Court judgment in the case of Cosmo Films Ltd. [TS-162-SC-2023-GST] upholding the validity of pre-import condition under the AA scheme, Circular no:16/2023-Customs and Trade Notice no: 07/2023-24 dated 8 June 2023 was issued to provide that all the imports made under the AA scheme on or after 13 October 2017 and up to and including 9 January 2019 which could not meet the pre-import condition may be regularised by making payment of IGST and GST Compensation Cess (Cess) along with the procedure for making payment of IGST and Cess and its consequential claim of input tax credit/refund (as the case may be)1.

In this regard, DGFT has issued a Trade Notice clarifying the applicability of pre-import conditions on the following import-export scenarios:

Sl. No.

Issue

Whether the pre-import condition violated?

1.
  • AAs under which exports have been made between 13 October 2017 and 9 January 2019; and
  • Import is made on or after 10 January 2019.

No

2.

 
  • AAs were issued on or before 9 January 2019; and
  • Import is made on or after 10 January 2019.

No. Pre-import conditions will not be applicable.

3.

If against an AA, imports were made as under:

  • Partly up to 9 January 2019; and
  • Remaining on or after 10 January 2019.

Whether the imports made on or after 10 January 2019 will be subject to pre-import conditions.

No.

4.

Imports made under AA on payment of IGST and Cess

No (irrespective of the date of import, the pre-import condition will not be applicable).

 

[Trade Notice no: 27/2023 dated 25 September 2023]

 

1 Our summary of the Trade Notice can be accessed here.