62 Rule violation under rule 96(10) of CGST act
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In response to demand letter from Asst Commissioner, Tuticorin customs, we wish to pay the IGST on imports customs duty which we had not done as it was imported under advance licence for the year 2020-2021 and submitted a reply for the same to Asst Commissioner, Tuticorin Customs in Feb 2022 to accept to pay the IGST on imports . But the AC,Customs has not replied on this so far. Since we are concerned about the interest accrual if any, we do not know, how to take this forward.

We are ready to pay IGST on imports customs duty to satisfy the rule 96(10), but the customs has not given its consent/directions/procedure to make the payment. Pl. advise us how we can proceed further on this matter.

Ans. This is a very subjective matter and needs proposal analysis of the facts and figures.

Firstly, if you want to go for the refund of IGST, then you are supposed to pay the amount on imports but availability of Input Tax Credit will be in question in the light of timelines for the availment of Input Tax Credit on imports. If you are not getting reply form the department, it  depends on the question you have raised in the reply submitted wherein you have accepted to pay the demand.

Secondly, if you continue to avail the benefit under advance licensing, in that case you can’t get for the refund under export with payment of duty, if any refund granted will be recovered by the department.

In case you have any further query, do let us know.

It is also advised to take a detailed opinion to have better clarity.

61 SIR, PLEASE TELL THE RATE OF DALIA NON-BRANDED AND ITS HSN CODES. WHETHER IT SHOULD BE COVERED IN 1101,110311

Ans. Chapter 11 of the Custom tariff is about “Products of the Milling Industry; Malt; Staches; Inulin; Wheat Gluten”

HSN 1103 bifurtaes cereal groats, meal and pellets on the basis whether the products bears a brand name or not.

Non-branded Dalai will fall under 110311 taxable @ NIL rate , whearas branded Dalai will be taxable @ 5%.

60 A client has received notice u/s 74 along with DRC-01 in feb’22 in which he has been demanded whole ITC available in Credit ledger. His registeration was cancelled in dec 21 on account of wrongful availment of ITC of 516000 of FY 17-18 and 18-19 of one defaulting supplier. Now, how to calculate interest as per section 50 and penalty as per section 74. Also please guide next course of action to be taken

Ans. In relation to your query pertaining to Interest under section 50 and penalty under section 74 of the CGST Act, please find below the respone:

As per sub-section (3) of section 50, where the input tax credit has been wrongly availed and utilised, the registered person shall pay interest on such input tax credit wrongly availed and utilised, at such rate not exceeding twenty-four per cent. as may be notified by the Government.

Further as per section 74(8), any person chargeable with tax but before service of notice under sub-section (1) of section 74, is required to pay the said tax along with interest payable under section 50 and a penalty equivalent to fifteen per cent.

As per section 74(8), any person chargeable with tax under sub-section (1) of section 74, is required to pay the said tax along with interest payable under section 50 and a penalty equivalent to twenty-five per cent, of such tax within thirty days of issue of the notice.

As per section 74(11), any person served with an order issued under sub-section (9) pays the tax along with interest payable thereon under section 50 and a penalty equivalent to fifty per cent, of such tax within thirty days of communication of the order.

Otherwise as per Section 74(1), penalty equivalent to 100 percent of the tax specified in the notice shall be levied.