Supplies of goods from SEZ: IGST required to be paid twice under GST regime: Unintended (?) but true

1. Section 5(1) of the IGST (read with Section 7(5) of the IGST Act) is the levy section for levy of IGST on clearances from SEZ to DTA

2. Section 3(7) of "Customs Tariff Act" borrows the machinery provisions from the Customs Act for the point of levy and collection of the LEVY under section 5(1) of the IGST Act. 3(7) of CTA is NOT a levy section. This is because of the proviso to section 5(1) of the IGST Act.

3. Please compare Section 3(7) “liability to pay” with a CTA “levy” under Section 3(1). "Additional duty" under section 3(1) of the Customs Tariff Act (popularly called CVD) is an independant levy under the CTA which Additional Duty is collected by borrowing the provisions of the "Customs Act" ( old Section 3(7), new 3(12) of CTA). Hence 3(1) duty is only a duty under Section (3) (1) of the CTA, (Not under the Customs Act) which Additional Duty is collected by the machinery provisions of the Customs Act. That is precisely the reason behind Section 30 of the SEZ Act specifying that "customs Duty" as well as "duties" under the "CTA" - thus differentiating duty under the Customs Act with the 'Duties' under CTA. So, Customs duty under Section 12 of the Customs Act is thus different from the independent "duty" under Section 3(1) of the CTA.

4. the definition of Imports in Section 2(o) of the SEZ Act does not include clearances from SEZ to the DTA. hence, there is no double levy. there is only one levy, that is the levy of IGST under Section 5(1) of IGST.

RG_Subramanian RG_Subramanian 09/06/2017