The High Court of Andhra Pradesh ruled that only Customs authorities, not GST officers, have the jurisdiction to assess and levy Integrated Goods and Services Tax (IGST) on imported goods. This decision came in the case of Avanti Feeds Limited versus the Deputy Commissioner of State Tax and others. Avanti Feeds Limited, a company manufacturing aquatic feed, had imported inputs like fish meal and claimed IGST exemptions for the years 2017–18 to 2022–23. The Deputy Commissioner of State Tax inspected the company and issued an intimation under Section 73(5), disputing these exemption claims. Despite the company's response, a fresh show cause notice was issued, raising additional issues based on a circular already invalidated by another High Court.
Customs authorities had independently initiated proceedings and eventually accepted the company's exemption claim, affirming that IGST on imports falls under Customs jurisdiction. The court addressed whether State GST authorities could assess and levy IGST on imports and issue show cause notices. The court concluded that under the IGST Act and the Customs Act, IGST on imports is levied at customs clearance, thus only Customs officers can assess this tax, rendering State GST actions invalid.
The court clarified that while GST laws allow cross-empowerment, it is applicable only where the taxpayer is administratively assigned to that authority. Since Avanti Feeds was under Central jurisdiction, State officers lacked authority. The continuation of GST proceedings by State authorities after Customs had concluded proceedings was deemed inappropriate. Furthermore, the court noted that the circular relied upon was already struck down and issuing a single show cause notice for multiple years was impermissible.
Order Date – 01 April 2026
Parties : Avanti Feeds Limited Vs Deputy Commissioner of State Tax, Principal Commissioner of State Tax, Union of India and State of Andhra Pradesh
Facts –
- Avanti Feeds Limited, a company engaged in manufacturing aquatic feed, imported inputs like fish meal and claimed IGST exemption for the period 2017–18 to 2022–23.
- The Deputy Commissioner of State Tax inspected the petitioner’s premises and issued an intimation under Section 73(5), disputing exemption claims and classification of imported goods.
- Despite the petitioner’s reply, a fresh show cause notice dated 10.04.2023 was issued raising additional issues and relying on a circular already struck down by another High Court.
- Meanwhile, Customs authorities independently initiated proceedings and later accepted the petitioner’s exemption claim, holding that IGST on imports falls within Customs jurisdiction.
Issue –
- Whether State GST authorities have jurisdiction to assess and levy IGST on imported goods and issue show cause notice in such cases?
Order –
- The Court held that as per the IGST Act read with the Customs Act, IGST on imports is levied and collected at the time of customs clearance. Hence, only Customs officers can assess such tax, making State GST action invalid.
- Though GST laws allow cross-empowerment, it applies only where the taxpayer is administratively assigned to that authority. Since the petitioner was under Central jurisdiction, State officers could not assume authority.
- Once Customs authorities initiated and concluded proceedings on the same issue, continuation of GST proceedings by State authorities was inappropriate and legally unsustainable.
- The Court noted that the relied circular had already been struck down and thus could not be enforced. Additionally, issuing a single show cause notice covering multiple years was held impermissible.
