The Supreme Court has issued notice on a petition challenging the Andhra Pradesh High Court’s ruling that the power to assess and collect Integrated Goods and Services Tax (IGST) on imported goods rests exclusively with Customs authorities.
A Bench of Justice Pamidighantam Sri Narasimha and Justice Alok Aradhe, on October 27, 2026, issued notice on the application seeking condonation of delay as well as the Special Leave Petition filed by the State tax authorities against the Andhra Pradesh High Court’s judgment.
The Supreme Court’s order does not grant a stay of the High Court judgment or decide the jurisdictional dispute on merits.
The assessee which manufactures and supplies aquatic feed, imports inputs such as fish meal, soya and algal oil. The company had claimed exemption from IGST on the import of certain inputs during the assessment years 2017–18 to 2022–23.
Although the company was administratively allocated to the Central GST jurisdiction, the Deputy Commissioner of State Tax initiated proceedings following an inspection of its business premises on November 11, 2022.
An initial intimation dated December 19, 2022, issued under Section 73(5) read with Rule 142(1A), questioned certain exemption claims and classifications. The disputed matters included the exemption claimed on imported Rovimix AVP Mineral, an input used in manufacturing aquatic feed, and fish meal.
The company submitted its response on January 12, 2023. The State tax officer subsequently issued a second intimation dated April 10, 2023, which the company challenged before the High Court.
The challenge also extended to Circular No. 80/54/2018-GST dated December 31, 2018, relied upon in relation to the disputed exemption.
The company argued that the State GST officer lacked jurisdiction on two separate grounds.
First, it submitted that assessment and recovery of IGST on imported goods fall within the Customs framework. It relied on the proviso to Section 5(1) of the IGST Act and the relevant provisions of the Customs Act, 1962.
Second, the company contended that its administrative allocation to the Central jurisdiction prevented the State officer from assuming jurisdiction through the cross-empowerment provisions.
It further argued that the December 2018 circular imposed conditions beyond the exemption notification and had already been struck down by the Madras High Court in Jენefa India v. Union of India.
The State tax authorities opposed the writ petition, arguing that the company should respond to the notice before the issuing authority instead of approaching the High Court at that stage.
On jurisdiction, the Revenue relied on the statutory provisions concerning cross-empowerment, GST Council deliberations and administrative communications. It maintained that State GST officers could exercise powers under the Central GST and IGST enactments.
The Revenue also argued that the State proceedings had begun before the Customs proceedings and therefore could not be treated as subsequently initiated parallel proceedings.
The High Court confined its examination to jurisdiction and did not consider the Revenue’s submissions on the substantive tax merits.
A Division Bench of Justice R. Raghunandan Rao and Justice T.C.D. Sekhar, in its judgment dated April 1, 2026, held that assessment and collection of IGST on imported goods must be undertaken by Customs authorities.
The Court examined the proviso to Section 5(1) of the IGST Act, under which integrated tax on imported goods is levied and collected in accordance with Section 3 of the Customs Tariff Act, 1975, at the point when customs duties are levied under the Customs Act.
It also considered the definition of “assessment” under Section 2(2) of the Customs Act. The High Court explained that this definition extends beyond customs duty to the determination of tax, cess and other amounts payable under the Customs Tariff Act or other applicable laws.
On that basis, it held that the rate and quantum of IGST payable on goods in the course of import must be assessed within the Customs framework.
The Court distinguished this function from the assessment and collection of IGST on the movement of goods within India, for which authorities under the IGST Act would continue to have a role.
It further observed that a State or Central GST officer stationed in a State that is not the point of entry of imported goods could not exercise jurisdiction at that point of entry. Such jurisdiction, it reasoned, belongs to Customs officers.
The High Court also recorded that Customs authorities had issued a notice dated January 24, 2024, culminating in an order dated August 8, 2025.
According to the judgment, the Commissioner of Customs accepted the company’s claim that the imported Rovimix AVP products were eligible for exemption. The Commissioner also held that assessment and payment of IGST on imported goods fell within the jurisdiction of Customs officers.
The High Court observed that, in view of the Customs proceedings, it would have been inappropriate for the State tax officer to continue the proceedings concerning import IGST.
The High Court separately addressed whether a State GST officer could exercise jurisdiction under the IGST Act over a taxpayer administratively allocated to the Centre.
The Court held that Section 6 of the CGST Act and Section 4 of the IGST Act enabled an Andhra Pradesh GST officer to act under those enactments only where the taxpayer had been administratively allocated to the State and the officer was the proper officer for that taxpayer.
Since the assessee had been allocated to the Central Government, the Court held that the State officer could not invoke Section 4 of the IGST Act to assume jurisdiction in this case.
The High Court noted that the Madras High Court had already struck down Circular No. 80/54/2018-GST in Jenefa India.
Relying on Kusum Ingots and Alloys Ltd. v. Union of India, the Andhra Pradesh High Court reasoned that the circular’s invalidation operated across India. It therefore found no need to strike down the circular again.
The High Court allowed the writ petition and set aside the impugned notice insofar as it concerned the exemption claimed on imported goods, holding that the State officer lacked jurisdiction.
It also set aside the notice concerning the remaining turnovers and issues because it covered multiple years. For this conclusion, it relied on its judgment in S.J. Constructions v. The Assistant Commissioner and Others.
However, the Court expressly preserved the power of the relevant authorities to initiate assessment or other proceedings under the applicable enactments if they considered that further tax liability existed.
The relief therefore did not amount to an unconditional declaration that the company had no further tax liability.
The Court has called for a response to the petition and the delay-condonation application; the underlying questions remain undecided by the Supreme Court.
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