A case relating to advance authorization scheme has been pending in the Gujarat High Court. Abhishek Rastogi, counsel, petitioners, and partner at Khaitan & Co stated that apart from Gujarat, the High Courts in different states are still getting these kinds of notices, so the Punjab and Haryana Court has initiated actions. “The pre-import condition has been a subject of debate even after the stay by the Gujarat HC against DRI notices.”
An advance authorization scheme has been implemented by the government officials under which the taxpayer doesn’t require to pay basic customs duty on imports, although, he is entitled to pay Integrated Goods & Services Tax (IGST) under the advance authorization scheme which can be claimed in the form of ITC if eligible based on export fulfillment.
Previously, the Central Bureau of Indirect Taxes and Customs (CBIT) and the commerce ministry had implemented a clause of “pre-import” to exempt custom duties on the import under the advance authorization scheme.
After the changes in the advance authorization scheme, the Directorate of Revenue Intelligence (DRI) has started sending notices to the exporters.
The Good and Services tax Council (GST), the Finance Ministry and the Commerce Ministry have received the notification from the Punjab and Haryana High Court to stop providing the benefits of advance authorization scheme to exporters under the Goods and Services Tax (GST) reform.