Goods and Service Tax – Export of Goods & Services
By: – CSSANJAY MALHOTRA
Goods and Services Tax – GST
Dated:- 17-9-2016
Goods and Service Tax – “Export of Goods”
GST is not the change in Tax Structure but would result in Business Transformation. One would definitely witness the Growth in Exports with the introduction of GST.
Taxes and Duties are never exported and have to be neutralised to the Exporter by way of refund or drawback so that the same may not add to the cost of goods and exports remain competitive in the International market.
Exports can be Direct Exports, Deemed Exports or Third Party Exports. “Direct Exports” refer to exports where the goods supplied are exported to any country outside India and the payment is received either in Free Foreign Exchange or in Indian Rupees through Vostro account. “Deemed Exports” refer to exports where the goods supplied do not leave India and the payment is received either in Free Foreign Exchange or in Indian Rupees.
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of unutilised input tax credit.
Time Limit for GST Refund
Section 38(1) of Model GST Law 2016 provides that the exporter claiming refund has to file application for claiming refund with TWO YEARS from the “Relevant Date” (defined at the end of article)
Refund under GST
In the present Central Excise Act, exporter of goods procure Duty Free material against CT-1, CT-3, Concessional Duty Certificates and export the goods without payment of duty under Bond. In GST Regime, all forms i.e. CT-1, CT-3 shall be done away with and the goods have to be purchased on payment of GST which is available for refund.
No refund shall be admissible if the amount is less than ₹ 1000/-
Mentioned below are the options available under GST with the exporter for availing Refund in respect of Export of Goods:
* Refund of GST paid on Input & Input Services is available under GST OR alternatively Rebate of GST is available on finished goods. (This provision is similar to the existing provision under
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nd on payment of duty for claim under rebate.
Section 38 of Model GST law provides for Refund of unutilised accumulated on account of Exports, except on goods which are subject to Export Duty. Rule 38(4)(a) provides for refund of 80% to taxable person within the time specified and terms and conditions to be defined in GST Rules to be framed and balance 20% to be released after due verification of all the export documents. In any case the refund has to be processed within a maximum period of 90 days.
Refund on Export of Goods / Services is available to the Exporter in respect of Tax paid on Inputs, services used in the supply of goods for Export. (Section 38(6)(a) of Model GST Law)
Deemed Exports – Refund of GST
In the present environment, the supplies to EOU / Projects under International Competitive Bidding / Mega Power Plants / World Bank funded Projects are exempted against Concessional Duty Certificates, which does not exist in the GST- Model Draft Law.
GST is to be paid on s
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ll of Lading / Airway Bill/ Commercial Invoice / Packing List / Transporters GR in case of Movement by Road / Bank Realisation Certificate.
* Invoice wise sales data is to be uploaded online at the time of submission of Return for Outward supplies; GSTIN may establish linkage between ICEGATE, DGFT and GST returns to ensure sanction of valid export claims.
* E-BRC module for payment realisation in case of export of material as exists in the DGFT system can be verified online by GST officer for processing of claim. The same would reduce the transaction cost of Exporters and adds to Ease of Doing Business.
“Relevant Date “is defined under Model GST Law as:
* in the case of goods exported out of India where a refund of tax paid is available in respect of the goods themselves or, as the case may be, the inputs or input services used in such goods, –
(i) if the goods are exported by sea or air, the date on which the ship or the aircraft in which such goods are loaded, leaves India,
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) issue of invoice, where payment for the service had been received in advance prior to the date of issue of the invoice;
(e) in case where the tax becomes refundable as a consequence of judgment, decree, order or direction of Appellate Authority, Appellate Tribunal or any Court, the date of communication of such judgment, decree, order or direction;
(f) in the case of refund of unutilized input tax credit under sub-section (2), the end of the financial year in which such claim for refund arises; and
(g) in the case where tax is paid provisionally under this Act or the rules made thereunder, the date of adjustment of tax after the final assessment thereof.
The basic principle lying behind GST is to do away with the exemptions so that the Tax Base shall be widened thus resulting in Reduction in GST Rates.
Section 38 of Model GST law provides for Refund of unutilised accumulated on account of Exports, except on goods which are subject to Export Duty. Rule 38(4)(a) provides for refun
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