The Central Board of Indirect Taxes and Customs vide Circular No. 3/1/2018-IGST dated May 25, 2018 has Clarified that IGST would not be applicable on the supply of goods before their clearance from the warehouse.
It is seen that the “transfer/sale of goods while being deposited in a customs bonded warehouse” is a common trade practice whereby the importer files an into-bond bill of entry and stores the goods in a customs bonded warehouse and thereafter, supplies such goods to another person who then files an ex-bond bill of entry for clearing the said goods from the customs bonded warehouse for home consumption.
It is therefore, clarified that integrated tax shall be levied and collected at the time of final clearance of the warehoused goods for home consumption. This Circular would be applicable for supply of warehoused goods which are deposited in a customs bonded warehouse on or after April 1, 2018.
It is requested that suitable trade notices may be issued to publicize the contents of this Circular.
Read More at: http://www.cbic.gov.in/resources//htdocs-cbec/gst/igst-circu-3.pdf