New Delhi, July 18 (KNN) In a relief to the exporters, the Delhi High Court had issued interim order to prohibit charging of Integrated Goods & Services Tax (IGST) on imports under the advance authorisation scheme for exporters. On eligibility of the benefit with retrospective effect from July, the court has now observed that the authorities should verify fulfilment of obligations under advance authorisation licences and assess cases accordingly, instead of charging IGST on imports.

Under an advance authorisation duty-free import of inputs is allowed, which are physically incorporated in export product. While upfront exemption was extended only to basic Customs duty, exporters were required to pay IGST on imports.

A petition was filed in the Delhi High Court challenging the move to impose IGST on advance authorisation scheme for exporters.

Hearing the case, the court had issued an interim order to prohibit charging of IGST on imports under the scheme.

The GST Council had accordingly amended the rules in October after the court’s order. However, an issue still remained as to what happened to those who had not paid IGST on imports between July and October.

Various petitions came up for final hearing before the court on Monday. The court upheld the eligibility of the benefit with retrospective effect from July.

According to the lawyer who argued the case, the court observed the most appropriate course of action for the authorities would be to verify fulfilment of obligations under advance authorisation licences and assess cases accordingly, instead of charging IGST on imports.

Sharing views, Animesh Saxena, a textile entrepreneur cum Vice President FISME, said, “The will hardly have an impact on MSME sector as this decision has been taken for certain section of people who were charged the tax from July to September last year.”

He said, “From October, government already changed the policy and between July and September people who had imported and paid IGST, the court has ruled in their favour that it shouldn't be charged.”

Saxena opined that this would not affect MSMEs in any way. It is just one of the cases where some people who were affected will get the relief.