Controversy over GST on imported goods escalated in the post-Corona period

Mumbai, Ta. Thursday, October 29, 2020

Many companies are facing higher Integrated Goods and Services Tax (IGST) on imported goods due to Corona. But when the situation returns to normal and imported goods become cheaper, many companies in the country are worried that the GST on such goods could lead to an inquiry by tax officials.

Corona has disrupted the supply chain and created a shortage of goods which has made imported goods more expensive. Tax officials usually insist on fixing the true price only once they have seen the higher price. They seem to be inquiring against lower prices in the bills.

Corona has, in most cases, increased the cost of imported goods by 15 to 20 per cent. "We are worried that indirect tax officials will challenge lower-priced bills once the situation returns to normal," said an electronics importer.

As the price of goods goes up, so does the collection of IGST on it. In addition to import duty, GST has also increased due to the impact of rising prices of imported goods.

The government does not disclose the tariff value for every product like gold and silver for calculating import duty, so controversy remains in such cases, said a tax expert.