Karnataka AAR: GST Registration not required by Importer in state where port of import of goods is located

Authority of Advance Ruling (AAR) in Karnataka for Goods & Service tax gave advance ruling on 18^th March, 2020 in the case of M/s Kardex India Storage Solution Private Limited stating that Importer of Goods is not required to take registration in the state where Port of Import of goods is located. The case is described as under:

Facts of the Case - Applicant is the importer of storage solutions and vertical storage solutions (machines) from Germany and further supplies the goods imported to industrial customers all over India. ? At the time of filing application, applicant used to first transport goods to its registered place of business i.e. Bangalore and then supplied the goods to industrial customers all over India, however the applicant came across a lot of logistical problems and found it costly. The applicant seeks advance ruling on following matters:

• Whether the applicant can take credit of IGST paid on import of goods?
• Whether applicant can issue tax invoice with IGST to the customer?-
• Whether applicant needs to obtain registration in the state where the port of clearance is located?

Observation ? Considering the above facts, applicant intends to import goods to the nearest port located at customer’s place and supply the goods directly from port to customers’ place. ? The applicant is liable to pay Integrated Goods and Services Tax (IGST) on goods imported by him in India on reverse charge basis and according to Section 20 of IGST Act, IGST paid can be utilized as credit of Input Tax of imported goods which are used in course or furtherance of his business. The place of supply of applicant and the permanent establishment is located in Karnataka.

The applicant uses that GSTIN for paying tax on imported goods and for import purposes.  The applicant is of the view that when there is no permanent establishment of business in state of Port of import then there is no need take registration there and it is deemed that goods are supplied to the location of supplier i.e. Karnataka.

Therefore, if the goods are supplied from the port to other state or Union Territory then it will be considered as Inter State Supply and if goods are supplied within same State or Union Territory then it will be considered as Intra state supply.

Judgment/Ruling  AAR after considering the above facts and observations passed the following rulings:-  The applicant is eligible to claim credit of tax paid on import of goods as per section 20 of the IGST Act 2017 read with section 16 of the CGST Act, 2017. ? The applicant can issue tax invoice with IGST to the customer as per section 20 of the IGST Act 2017 read with section 31 of the CGST Act 2017 for the interstate transaction as provided under section 7(1) of the IGST Act 2017, when the goods are directly dispatched from the port of import with invoicing done from the registered place of business.  The applicant need not obtain registration in the state where the port of clearance is located, if he is not making any supply from the State in Which the port is located