CBIC has issued a circular for clarification regarding the applicability of IGST on repair cost, insurance, and freight, on goods reimported after being exported for repairs

Jul 21, 2021 | by Avantis RegTech Legal Research Team

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Finance & Taxation Compliance

The Central Board of Indirect Taxes and Customs (CBIC) on July 19, 2021 has issued a circular for the Clarification regarding applicability of IGST on repair cost, insurance and freight, on goods re-imported after being exported for repairs, on the recommendations of the GST Council made in its 43rd meeting.

GST rate and exemptions are prescribed on the recommendation of the GST Council. The Council, at the time of roll out of GST decided to continue the concession as were available.

In the said discussion, the IGST levied on such goods re-imported after being exported abroad for repairs was a significant factor considered by the GST Council while deciding the rate on MRO services. The above deliberations of the GST Council leave no doubt that the Council had consciously recommended for levy of IGST and cess, albeit at the repair, insurance and freight cost instead of the entire value of goods imports.

[Circular No. 16/2021- Customs]


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