Firms who were importing the raw substance used to make the sanitizers and disinfectants laid the government to the court towards the nonavailability of the claim of advantages over the apparent typing error in the goods and services tax (GST) platform.
Lower custom duty is been paid by the importers of the ‘denatured ethyl alcohol’, a raw material used in hand sanitizers and disinfectants, for several years which comes under excisable goods.
Below the latest tax platform, the excisable goods were mentioned inside the new rules and are causing confusion.
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The custom department specified that as excise is not in GST part thus an additional taxes are payable said under the previous law.
“There appears to be an unintended omission with respect to the usage of the words ‘excisable goods’ instead of excisable goods subject to tax under GST laws and hence a judicial review is important at this stage,” Abhishek A Rastogi, partner at Khaitan & Co commented to the Bombay High court.
The department of excise duty imposing the notices and drive raids on the availing that there is no custom tax besides GST law thus these firms must furnish the supplementary taxes.
While the firms in their writ application to Bombay high court said that this is a typo and the tax council in original it was Excisable goods and not taxable which they had copy-pasted.
To date, these importers were paying 2.5% of tax on all the imports. But not a supplement of 2.5% is asking by the government on all these imports.
Some firms has surrounded the courts and availed that the real intention of the government was to prolong the advantage inside the amended tax platform.
The raw materials imports come beneath the scanner as their imports rise during the covid-19.
At the first point, the firms were urged to file the provisional tax bonds which ensure to furnish the particular amount in the future.
The majority of the importers were paying 2.5% during the rest of the duty was filed via provisional duty bonds.
It is used to mainly protect the government revenue along with refusing the influence on the importer’s cash movements. But in the last week, various importers and firms urged to add on the additional amount.
“The furnishing of provisional duty bonds at the time of effecting clearances of imported denatured ethyl alcohol is not clearly a solution and hence there is a request that courts must direct to cancel the previous bonds furnished,”
