IGST and Compensation Cess on goods re-imported after being exported for repairs would be wholly exempt

Last updated: 17 January 2022

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Quick Summary

The Delhi High Court has ruled that Interglobe Aviation Limited is exempt from paying IGST and Compensation Cess on aircraft and spare parts re-imported into India after undergoing repairs abroad. The court found that the relevant exemption notification only permitted the levy of Basic Customs Duty (BCD) on the cost of repairs, insurance, and freight, not IGST or Compensation Cess. This decision provides relief to businesses facing financial losses due to the incorrect levying of these taxes.

Court :
CESTAT Principal Bench, New Delhi

Brief :
The assessee was a scheduled airline operator engaged in the business of transportation of passengers and goods by air within and outside India. It was re-importing the aircraft and spare parts sent outside India for repairs and maintenance. It claimed exemption under Notiﬁcation No. 45/2017 –Customs dated June 30, 2017 ("the Exemption Notification") from the payment of IGST on goods reimported by it in India after repair. The Customs authorities refused the same on the ground that IGST was leviable on the fair cost of repairs and cost of insurance and freight.

Citation :
[W.P.(C) 5617/2021 dated June 1, 2021

Daily Limit Reached