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Pharma MSMEs seek DoP’s intervention to get input tax credit on penalty paid on excess import quantity under AA
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Laxmi Yadav, Mumbai
May 30 , 2022
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Small and Medium Pharmaceutical Manufacturers have sought the department of pharmaceuticals (DoP)’s intervention to ensure availability of goods and services tax (GST) credit on GST portal for penalty paid on excess import quantity under Advance Authorization scheme as per paragraph 4.49/4.50 of Hand Book Procedures (HBP). It will help manufacturers take input tax credit on GST paid in the total penalty on excess import quantity.
Earlier drug manufacturers who used to pay penalty on excess import quantity under Advance Authorization scheme as per para 4.49/4.50 of HBP, could avail input credit on excise duty by producing original manual challan.
After implementation of GST, if a drugmaker pays a penalty on excess import quantity through TR-6 Challan, the same does not reflect in the portal of GST, therefore the company is unable to take input tax credit on GST paid in the total penalty on excess import quantity.
Expressing concern over it, the Small and Medium Pharma Manufacturers Association, representing the small and medium pharma manufacturers pan India has requested DoP joint secretary N Yuvaraj to ensure that payment made through TR -6 Challan may be reflected on the GST portal so that the company can take input credit of GST portion.
We have appealed to the DoP to make necessary provision in the software of the customs and GST so that payment made through TR-6 Challan is reflected in the GST portal of the importer for the GST portion so that company may get the input credit of GST paid,” said Nipun Jain, chairman, Small and Medium Pharma Manufacturers Association.
According to GST law, an importer under Advance Authorization scheme does not need to pay basic customs duty and Integrated Goods and Services Tax (IGST) on imports.
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