Amendments to GST have helped resolve disputes about goods sold within bonded warehouses
New amendments announced to the goods and services tax framework have helped resolve a dispute surrounding the constitutional validity of levying tax on goods sold within bonded warehouses. Importers who had dragged the government to the Delhi Court over the issue withdrew the petition on Monday, after lawyers representing the government and GST Council told the court about the amendment and how it would resolve the matter.
"This will have a positive impact on all importers who use customs bonded warehouses,” said Abhishek A Rastogi, a partner at Khaitan & Co who is also a lawyer for importers in the case. “It has removed a major irritant.” Importers filed a writ petition claiming that a 2017 circular that allowed for a levy of integrated GST on sale within the warehouse had led to double taxation — the first one during the import transaction and second when goods were transferred between the bonded warehouses.
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