ALO Law Office- IDT Tax I Arbitration I Litigation
Date: 18.4.2025
CESTAT New Delhi Reinforces that interest in delayed IGST payments must be computed using CGST framework provisions, not the customs law
The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), New Delhi, recently delivered a significant judgment in the case of M/s JLC Electromet Private Limited vs. Commissioner of Customs, Jodhpur. β This decision sheds light on the nuanced distinction between Integrated Goods and Services Tax (IGST) and Additional Duty of Customs, as well as the applicability of interest on delayed IGST payments. β Letβs dive into the details of this case and its implications.
Background of the Case
The appellant, M/s JLC Electromet Pvt. β Ltd., imported goods under 13 Advance Authorizations, availing exemptions from Basic Customs Duty (BCD) and IGST. β However, the Directorate General of Revenue Intelligence (DRI) found that the exemption from IGST was incorrectly claimed, as the appellant did not fulfill the “actual user” condition required under the scheme. β Upon being notified, the appellant paid the IGST along with interest.
The dispute arose over the interest payment. β The appellant argued that IGST, being an Additional Duty of Customs, should not attract interest under the provisions of the Customs Act, citing precedents from the Bombay High Court and the Supreme Court. β The Commissioner of Customs, however, appropriated the interest paid by the appellant, leading to this appeal.
This Article has been written by Shri Ravi Shekhar Jha, Advocate Delhi High Court based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.
Source: CESTAT New Delhi
Handy Reader for Download:
Write to us at office@aadrikaalaw.com
Tel: +91-11-4999 2707 I +91-9999005379