NEW DELHI: Finance Minister Arun Jaitley has introduced in the Lok Sabha a taxation-related Bill that seeks to, among other things, provide for levy of integrated goods and services tax (iGST) and GST compensation cess on imported goods.
The levy of integrated GST and GST compensation cess on imported goods — through an amendment to the Customs Tariff Act — is expected to provide a level-playing field to the domestic industry once the GST regime gets introduced in the Country.
Integrated GST (iGST) will replace the current countervailing duty once the GST system, scheduled to roll out in July, gets implemented, according to tax experts. iGST will be levied on reverse charge mechanism in the sense that the importer would initially bear the tax.
Under the proposed GST framework, basic customs duty on imports will remain outside and not get subsumed into GST.
The new Bill — Taxation Laws (amendment) Bill 2017— also provides for continuation of levy of central excise on petroleum crude, motor spirit (petrol), high speed diesel, aviation turbine fuel and natural gas, tobacco and tobacco products.
It also seeks to amend the Customs Act to include “warehouse” in the definition of “customs area” and ensure that an importer would not be required to pay the proposed integrated GST at the time of removal of goods from a customs station to a warehouse.
Taken together, the Bill seeks to amend the Customs Act 1962, the Customs Tariff Act 1975, the Central Excise Act 1944, the Finance Act, 2001 and the Finance Act, 2005 and to repeal certain enactments.
The Bill also seeks to abolish certain cesses or surcharges that are levied or collected as duty of excise or service tax under various Acts, such as on water consumed by certain industries and local authorities under the Water (Prevention and Control of Pollution) Cess Act 1977.