CBIC vide Circular No. 23/2019-Customs dated August 1, 2019, has decided to operationalize a refund mechanism of IGST paid on import of goods by the specialized agencies are as under:
- Section 55 of the CGST Act, 2017 (“CGST Act”) provides a refund of taxes paid on the notified supplies of goods or services or both received by them. In pursuance of this provision, Notification No.16/2017-Central Tax (Rate) dated June 28, 2017 has been issued which inter-alia provides that United Nations (“UN”) or a specified international organisation shall be entitled to claim refund of central tax paid on the supplies of goods or services or both received by them subject to a certificate from UN or that specified international organisation that the goods and services have been used or are intended to be used for official use of the UN or the specified international organization. A similar refund mechanism has been provided in respect of integrated tax vide notification No.13/2017-Central Tax (Rate) and Union Territory tax vide Notification No.16/2017-Union Territory Tax (Rate) respectively.
- Section 3 (7) of Customs Tariff Act, 1975 (CTA), provides for parity between the integrated tax rate attracted on imported goods and the integrated tax applicable on the domestic supplies of goods. In the case of UN and specialized agencies, the above referred to notifications envisage payment and then refund of taxes paid. Therefore, on this principle of parity, specialized agencies ought to get the refund of the IGST paid on imported goods.
Accordingly, Board has decided that respective customs field formations shall provide a refund of IGST paid on import of goods by the specialized agencies notified by Central Government under Section 55 of CGST, Act, 2017.
Complete Circular can be assessed at: http://www.a2ztaxcorp.com/wp-content/uploads/2019/08/Circular-No-23-2019.pdf