Trade through Shipki La suspended days after resumption over IGST

The decision was taken during an emergency meeting of the Kinnaur Indo-China Trade Association held on Wednesday after receiving communication from customs department regarding the applications of IGST on imports through the traditional route

The Kinnaur Indo-China Trade Association on Wednesday suspended Shipki La border trade, demanding Integrated Goods and Services Tax (IGST) exemption for goods imported through the route.

The association requested the Government of India, the Union ministry of finance, the Central Board of Indirect Taxes and Customs (CBIC), and the GST Council to extend IGST exemption to goods imported through the notified Indo-China Border Trade Route via Shipki La, on the same lines as the Customs Duty exemption already available. (File)

The decision was taken during an emergency meeting of the association held on Wednesday after receiving communication from customs department regarding the applications of IGST on imports through the traditional route.

“While customs duty has been exempted under Government of India Notification of July 23, 1996, to encourage and sustain traditional border trade, the imposition of IGST has substantially increased the financial burden on traders. Considering the limited value of trade, difficult terrain, transportation by mules, short trading season, and the socio-economic objective of this border trade, the levy of IGST makes the trade commercially unviable,” said association president Hishey Negi.

The association requested the Government of India, the Union ministry of finance, the Central Board of Indirect Taxes and Customs (CBIC), and the GST Council to extend IGST exemption to goods imported through the notified Indo-China Border Trade Route via Shipki La, on the same lines as the Customs Duty exemption already available.

“After detailed deliberations, the association unanimously resolved that no registered trader will undertake border trade with China through Shipki La until IGST is also exempted, in line with the exemption already granted from Customs Duty. We hope that the Government will appreciate the genuine concerns of the border traders and take an early decision in the larger interest of promoting border trade and strengthening the frontier economy.”

Reasoning the demand for exemption, Negi said, “The Indo-China Border Trade is not a commercial import-export activity in the conventional sense, but a special confidence-building measure and a traditional livelihood mechanism for the border communities. Imposing GST makes the trade economically unavailable for us,” said Negi.