Central Tax Circulars

CGST Circular 91/2019

To,

The Principal Chief Commissioners / Chief Commissioners / Principal
Commissioners / Commissioners of Central Tax (All) The Principal Director
Generals / Director Generals (All)

Madam/Sir,

Subject: Clarification regarding tax payment made for supply of warehoused
goods while being deposited in a customs bonded warehouse for the period July,
2017 to March, 2018 – Reg.

1) Attention is invited to Circular No. 3/1/2018-IGST dated 25.05.2018 whereby
applicability of integrated tax on goods transferred/sold while being deposited
in a warehouse (hereinafter referred to as the “warehoused goods”) was
clarified. In the said circular, it was enunciated that from 1st of April, 2018
the supply of warehoused goods before their clearance from the warehouse would
not be subject to the levy of integrated tax.

2) It has been brought to notice of the Board that during the period from 1st
of July, 2017 to 31st of March, 2018 (hereinafter referred to as the “said
period”), the common portal did not have the facility to enable the taxpayer to
report payment of integrated tax, in the details required to be submitted in
FORM GSTR-1, for such supplies especially where the supplier and the recipient
were located in the same State or Union territory. Hence taxpayers making such
supplies have reported such supplies as intra-State supplies and discharged
central tax and state tax instead of integrated tax accordingly. Now,
representations have been received from trade to clarify the same.

3) In order to ensure uniformity in the implementation of the provisions of law
across the field formations, the Board, in exercise of its powers conferred
by section 168 (1) of the Central Goods and Services Tax Act, 2017, hereby
issues the following instructions.

4) Supply of warehoused goods while deposited in custom bonded warehouses had
the character of inter-State supply as per the provisions of Integrated
Goods and Services tax Act,
2017. But, due to non-availability of the facility on the common portal,
suppliers have reported such supplies as intra-State supplies and
discharged central tax and state tax on such supplies instead of integrated
tax. In view of revenue neutral position of such tax payment and that facility
to correctly report the nature of transaction in FORM GSTR-1 furnished on the
common portal was not available during the period July, 2017 to March, 2018, it
has been decided that, as a one-time exception, suppliers who have paid central
tax and state tax on such supplies, during the said period, would be deemed to
have complied with the provisions of law as far as payment of tax on such
supplies is concerned as long as the amount of tax paid as central tax and
state tax is equal to the due amount of integrated tax on such supplies.

5) It is requested that suitable trade notices may be issued to publicize the
contents of this Circular.

6) Difficulty, if any, in the implementation of this Circular may be brought to
the notice of the Board. Hindi version will follow.