This is the case- In a 2017 notification by the central government, the importer was liable to pay 5% GST on freight paid on goods imported into India. Against this many importers from Gujarat filed a petition in the Gujarat High Court. In the 2020 judgment of the Gujarat High Court in Mohit Minerals v. Government of India, an importer entered into a contract with an exporter in another country to import foreign goods and transport them to an Indian port. The importer located in India has not paid any freight on the goods. Freight is paid to the shipping company by the exporter located in the other country while shipping the goods. In such a situation, GST cannot be charged in India on goods paid in another country.
Based on this judgment of the Gujarat High Court, the Mewar Chamber of Commerce and Industry on behalf of its members filed a petition in the Rajasthan High Court on 11 June 2020. Accordingly this decision has been taken. But the central government appealed to the Supreme Court against this decision. The Supreme Court dismissed the Central Government’s appeal and upheld the Rajasthan High Court’s verdict.
125 crore relief from GST- Importers of anything by sea have to pay 5 percent GST so far. Now after this decision, GST is not payable. Apart from textile mills, other industries in the state have to import many types of goods from foreign countries. In this, the industrialists were paying about Rs.125 crore as rent as 5 percent GST tax per year. About Rs.625 crore has been paid as GST in the last five years. Similarly, agricultural, mining and other commodities besides fiber, process house color chemicals, fertilizer group raw materials are imported through spinning unit at Bhilwara. Their GST was paid to the tune of Rs 8 crore per annum. But it will be peaceful now.
Big relief for importers Big Relief for Entrepreneurs- Supreme Court set aside order to collect GST tax from sea cargo importer. The Mewar Chamber of Commerce and Industry had earlier filed a case in the Rajasthan High Court challenging the recovery. Advocate Sarath Yadav from Jodhpur argued. The trial court ruled in favor of the chamber. But the central government appealed to the Supreme Court. Advocate Rishabh Sanjedi, arguing, dismissed the appeal. The court confirmed the central government’s decision. This has brought great relief to entrepreneurs.
RK Jain, General Secretary, Mewar Chamber of Commerce and Industry