Listening to the writ petition filed by one of many firms, Satyam Petrochemicals, the courtroom requested the customs division to present at the least every week’s discover earlier than taking any “coercive steps”.
The importers had claimed that the customs division had carried out seizures that would have impacted their provide and created a scarcity of the uncooked materials.
“Any coercive motion which impacts the imports of any important uncooked materials can have an effect on the availability of important output provides and any coercive measure should be examined in writ courts,” mentioned Abhishek A Rastogi, accomplice at Khaitan & Co. “Any summons which might be issued with out jurisdiction should even be examined earlier than the writ courtroom so that there’s truthful adjudication in opposition to the taxpayers.”
Within the writ petition, the importer mentioned that the customs division’s stand may affect the availability of a few of the essential supplies wanted throughout the Covid pandemic.
The categorisation dispute over the uncooked materials emanates from how it may be outlined and the tax fee relevant.
Importers of denatured ethyl alcohol have been paying a decrease or concessional fee of customs responsibility over time as this was categorised as ‘excisable items’.
Till just lately, these importers have been solely paying 2.5% responsibility on all their imports.
Now, they’ve been requested to cough up a further 2.5% responsibility.
Nevertheless, beneath the brand new GST framework, this half—excisable items—was injected into the brand new laws and that’s inflicting confusion, say tax consultants.
The customs division mentioned that since excise is just not a part of GST, the importers should pay extra taxes as per the prevailing laws.
A number of the firms had in March final 12 months approached the Gujarat Excessive Courtroom and Bombay Excessive Courtroom on this regard.
The Gujarat Excessive Courtroom had requested the oblique tax division to submit its rationalization after a number of firms importing a key uncooked materials used to make sanitisers and disinfectants dragged the federal government to courtroom following their incapability to avail advantages beneath the Items and Companies Tax (GST) framework.
Tax consultants say uncooked materials importers have come beneath the scanner as their imports grew throughout the pandemic.
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