Question17 :
 We had supplied a machine to SEZ pre 30 June. Now for some reason, the SEZ is returning the machine. We have asked them to charge 18% IGST on BOE as per provisions of Sec 142(1). However the SEZ is insisting to charge IGST @ 12.5% by virtue of Notification No. 46/2017 – Customs dated 30.06.2017 [point 1(d)]. Please clarify if SEZ is correct in charging 12.5% IGST? Would we be able to claim ITC of 12.5% IGST in such a case?  

Answer:  
You have rightly quoted Notification No 46/2017 of custom . We are reproducing relevant portion of the notification and try to under stand the same    The opening para is as follow

Notification No. 46/2017 ' Customs

New Delhi, the 30th June, 2017

G.S.R. (E).-In exercise of the  +++

++++++++++

prespects things done or++++++++++ when re- imported into India, from so much of the duty of customs leviable thereon which is specified in the said First Schedule, and the whole of the additional duty, integrated tax , compensation cess leviable thereon respectively under sub-sections (1), (3), (5), (7) and (9) of section 3 of the said Customs Tariff Act as is in excess of the amount indicated in the corresponding entry in column (3) of the said Table.

This notification exemt Tax to  levied in excess to the shown in column no 3 of the table given in the notification It means tax is to be paid to the extent given in column no 3because the amount over to it (excess) is exempted 

The column three is in corresponding  to column  no 2  now  coming to your case .It is covered under 1(d)  The relevant portion of the same is as follow

Table

Sno                                           Description                                        Condition   
1(d)     under bond without payment of Central Excise duty

amount of Central Excise duty not paid;

 
     

 If you will deduct the duty not paid which is 12.5% from the total import duty then levy will be 12.5%  and the excess over it is exempt  So your customer is correct. (Reply Dt. 05/01/2018)