04/2024-Integrated Tax (Rate) — Seeks to amend Notification No 09/2017- Integrated Tax (Rate) dated 28.06.2017.
Summary
Notification 04/2024-Integrated Tax (Rate), issued on July 12, 2024, makes a change to an existing rule regarding Integrated Goods and Services Tax (IGST) rates. Specifically, it tweaks Notification No. 09/2017- Integrated Tax (Rate) which outlined the IGST rates applicable to goods imported under specific export promotion schemes like Advance Authorisation, Export Promotion Capital Goods (EPCG), and Export Oriented Units (EOUs).
Essentially, this new notification adjusts the conditions under which these import benefits are available regarding IGST. It primarily impacts businesses involved in international trade who are importing goods under the above-mentioned export promotion schemes. These businesses need to carefully review the amended conditions outlined in the modified Notification No. 09/2017 to ensure they are compliant. They should consult with their tax advisors to fully understand the implications for their imports and to ensure they are accurately claiming any available IGST exemptions or reduced rates.
The change is effective immediately, from July 12, 2024. Importers utilizing these schemes should immediately align their import procedures with the updated notification to avoid potential issues with customs and GST authorities. It's crucial to understand the revised conditions to determine if any adjustments are needed in documenting imports and claiming IGST benefits. Failure to comply with the revised rules could lead to disputes and penalties.
Key Changes
| Change | Impact |
|---|---|
| Amendment to Entry 225 of Schedule I: Specifies that supply of Mentha arvensis oil (de-mentholised oil) is taxed at 5% when supplied for use in the manufacture of pharmaceutical products. | Provides clarity and potentially reduces the tax burden on Mentha arvensis oil used in pharmaceuticals, benefiting pharmaceutical manufacturers. |
| Omission of entries related to specified petroleum operations: Effectively removes the concessional GST rates previously applicable to certain activities and goods related to petroleum operations. | Likely increases the GST liability for entities involved in specified petroleum operations, potentially impacting the cost of exploration and production. |
| Changes in condition number 16 to SI. No. 453 of Schedule III: Introduces a condition that the said supply must be made to a Special Purpose Vehicle which is 100% owned by Central Government, State Government or both. | Amends the conditions for concessional GST for supply to SPVs in the Power sector requiring them to be fully owned by the Government, leading to a narrower applicability of the said concession. |