Amendment To Remove “Pre Import Condition” To Avail Exemption From IGST Under Advance Authorization /Advance License And Benefit Further Extended To Deemed Export Supplies.

You are aware that Notification No.79/2017 dtd.13/10/2017 was issued granting exemption for IGST for imports made under advance authorizations and advance licenses subject to “Pre import condition” by amending the  Notification No.16/2015-Cus; Notn.18/2015-Cus; Notn. 20/2015-Cus; and other notifications.

The said “pre import condition” was creating great difficulties for exporter who were importing goods after meeting with export commitments and they were forced to pay IGST on imports.

The said requirement of “Pre import condition” for importing goods under Advance Authorization/ Advance License has been removed by issue of following notifications:

  1. DGFT has issued Notification No.53/2015-20 dtd.10/01/2019 wherein it has amended Para 4.14 and Para 4.16 (ii) of Chapter 4 of Foreign  Trade Policy 2015-20. The said amendment removes pre import condition to avail exemption from integrated tax and compensation cess. Further the exemption is also extended to deemed export supplies.
  • To implement the above amendments of the policy, Customs have issued Notification No. 01/2019-Cus dtd.10/01/2019 wherein it amends Notfn.  No.18/2015-Cus and Notfn. No. 20/2015-Cus respectively. The said amendment visualizes import of goods under advance authorization/license claiming exemption for IGST for imports made after discharge of export obligation in full and if facility of input tax credit is availed under GST on the inputs used for manufacturer and supply of exported goods then the importer shall furnish a Bond to the DC/AC of Customs, binding himself to use imported goods in his factory or in the factory of supporting manufacturer. He shall also submit a certificate from a Chartered Accountant within six months from date of clearance of the goods certifying that imported material has been used in his factory or supporting manufacturer’s factory.

Further if input tax credit has not been availed under GST then he is required to furnish proof to that effect and Bond will not be required. Further benefit of the said import has been extended for physical exports or for deemed exports as enumerated under Notification No.48/2017-Central Tax dtd.18/10/2017.

We are attaching both the above notification separately for your ready reference.


Advocate Vinay S Sejpal

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