Guidance Note for Importer and Exporter on GST roll out
PUBLIC NOTICE. 25/2017 Dated:- 30-6-2017 Trade Notice
Customs
GOVERNMENT OF INDIA
MINISTRY OF FINANCE : DEPARTMENT OF REVENUE
OFFICE OF THE PRINCIPAL COMMISSIONER OF CUSTOMS
CUSTOM HOUSE, PORT AREA, VISAKHAPATNAM – 530 035
F. No. S2/08/2017-ED1
Date: 30/06/2017
PUBLIC NOTICE. 25/2017
Subject: – Guidance Note for Importer and Exporter on GST roll out-Reg.
Attention of all Importers, Customs Brokers, Members of the Trade and others is invited towards guidelines issued by CBEC for Importer and Exporter on GST roll out. Those guidelines are enclosed herewith and all concerned are directed to go through the same.
Difficulties, if any may be brought to the notice of the undersigned.
Dr.DK SRINIVAS
COMMISSIONER OF CUSTOMS.
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Document 1
I. Introduction:
Indian Customs gears up for GST roll-out
Guidance Note for Importers and Exporters
The purpose of this guidance note is to bring clarity about the impac
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ts by virtue of sub-
sections (7)&(9)
of Section 3 of the Customs Tariff Act, 1975. Barring a few commodities such
as pan masala
, certain petroleum products which attractlevy of CVD, majority of importswould
attract levy of
IGST. Further, a few products such as acrated waters, tobacco products, motor
vehicles etc, would
also attract levy of GST Compensation Cess, over and above IGST. IGST
andGST
Compensation cess, wherever applicable, would be levied on cargo that would arrive on
or after 1st July,
2017. It may also be noted that IGST would also be levied on cargo which has
arrived prior to
1″ July but a bill of entry is filed on or after 1 July 2017.Similarly ex-bond bill
of entry filed
on or after 1 July 2017 would attract IGSTand GST Compensation cess, as
applicable. In the case
where cargo arrival is after 1″ July and an advance bill of entry was filed.
before 1
July along with the payment of duty, the bill of entry may be recalled and reassessed by
the proper
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gage – Nil Rate
9804- Specified Drugs and medicines for personal use- 5%
9804- Other drugs and medicines for personal use- 12%
9804- All other dutiable goods for personal use- 28%
Likewise, different rates of tax have been notified for goods attracting Compensation Cess which
is leviable on 55 item
descriptions (of supply). These rates are mostly ad valorem. But some also
attract either specific rates (
e.g. coal) or mixed rates (ad valorem + specific) as for cigarettes. The
coverage of the goods
under GST compensation cess isavailable on CBEC website along with
their HSN codes and
applicable cess rates.The IGST Rates of Goods, Chapter wise IGST rate,
GST Compensation Cess
rates, IGST Exemption/Concession are available on CBEC website for
trade and departmental
officers as well.
Valuation and method of calculation: IGST is leviable on the value of imported goods and
for calculating integrated tax on any
imported article, the value of such imported goods
would be the
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y
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in the value for levy of IGST and Compensation Cess is an important change. These were n
hitherto included in the value for the
levy of additional duty of customs (CVD) or Speci
Additional Duty (SAD). The
IGST paid shall not be added to the value for the purpose
calculating Compensation Cess.
Although BCD, Education Cesses and IGST would be applicable in majority of cases, howeve
for some products CVD, SAD or GST Compensation cess may also be applicable. For differen
scenarios
the duty calculation process has been illustrated in Annexure-I of this document.
IV. Changes in import procedures:
Importer Exporter Code (IEC): In GST regime, GSTIN would be used for credit flow of IGST
paid on import of goods. Therefore, GSTIN would be the key identifier. DGFT in its Trade
Notice
No. 09 dated 12.06.2017 has statedthat PANwould be the Import Export code (IEC)
However, while PAN is identifier at the entity level, GSTIN would be used as identifier at the
transaction l
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and DFIA. IGST and
Compensation Cess will have to be paid on such imports.
The EXIMscrips under the export incentive schemes of chapter 3 of FTP (for example MEIS and
SEIS)
can be utilised only for payment of Customs dutiesor additional duties of Customs, on
items not
covered by GST,at the time of import. The scrips cannot be utilized for payment
ofIntegrated
Tax and Compensation Cess. Similarly, scripscannot be used for payment of CGST,
SGST or
IGST for domestic procurements.
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VI. EOUS and SEZ:
EOUS/EHTPS/STPs will be allowed to import goods without payment of basic customs du
(BCD) as well additional
duties leviable under Section 3 (1) and 3(5) of the Customs Tariff A
GST would be
leviable on the import of input goods or services or both used in the manufactu
by EOUS which can
be taken as input tax credit (ITC). This ITC can be utilized for payment
GST taxes payable on
the goods cleared in the DTA or refund of unutilized ITC can be claime
under Section
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om IGST has been provided on passenger baggage. However, basic customs
duty shall be leviable
at the rate of 35% and education cess as applicable on the value which is in
excess of the
duty free allowancesprovided under the Baggage Rules, 2016.
X.
Refunds of SAD paid on imports:
The need for SAD refunds arose mainly on account of the fact that traders or dealers of imported
goods were unable
to take credit of this duty (which was a Central tax) while discharging their
VAT or Sales tax
liability (which was State levy) on subsequent sale of the goods. Unless
corrected through a
mechanism such as refund (of one of the taxes) this would have resulted in
“double”
payment of tax.
With the introduction of GST on 01.07.2017, credit of “eligible duties” in respect of inputs held
in stock and inputs
contained in semi-finished or finished goods held in stock, is permissible to
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registered persons not liable to be registered under the existing law (for instance, VAT dea
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ms duty (BCD)
would not be available. In order to avail ITC of IGST and GST
Compensation Cess
, an importer has to mandatorily declare GST Registration number (GSTIN)
in the Bill of Entry.
Provisional IDs issued by GSTN can be declared during the transition period.
However, importers
are advised to complete their registration process for GSTIN as ITC of IGST
would be available based
on GSTIN declared in the Bill of Entry. Input tax credit shall be availed
by a registered person
only if all the applicable particulars as prescribed in the Invoice Rules are
contained in the said
document, and the relevant information, as contained in the said document,
is furnished in FORM
GSTR-2 by such person.
Customs EDI system would be interconnected with GSTN for validation of ITC. Further, Bill of
Entry data in non-EDI
locations would be digitized and used for validation of input tax credit
provided by GSTN.
XII. Drawback:
Exports under GST
No amendments have been made to the d
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of three months is also being provided from date of implementation of GST
i.e. 1.7.2017.
During this period, existing duty drawback scheme under Section 75 shall continue.
For exports during
this period, exporters can claim higher rate of duty drawback (composite AIR)
subject to
conditions that no input tax credit of CGST/IGST is claimed, no refund of IGST paid
on export goods
is claimed and no CENVAT credit is carried forward. A declaration from
exporter and certificate from jurisdictional GST officer in this regard has been prescribed in the
notification related
to AIRS. This will prevent double availement of neutralisation of input taxes.
Similarly, the
exporter can claim brand rate for Customs, Central Excise duties and Service Tax
during this
period.
Exporters also have the option of claiming only the Customs portion of AIR and claim
refund/ITC under GST
laws.
All Industry Rates for the transition period shall be notified before 1.7.2017. The AIR for post
tran
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ntral
Excise/Service Tax
paid and CGST/IGST paid inputs and inputs services or only CGST/IGST
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paid inputs and inputs services. In such situation, an exporter opting to claim composite rate
duty drawback during
transition period has to give specified declaration and produce certificat
as stated above so that he does
not claim double benefit. Exporter will have to reverse the ITC
any availed and also ensure
that he does not claim refund of ITC/IGST. Requisite certificate fro
GST officer shall also be
required to this effect. As mentioned earlier, exporters will also hav
option of claiming credit/refund
of CGST/IGST and claim Customs rate drawback.
XIII.
Refund of IGST paid on exports and Export under Bond scheme:
Under GST regime exports would be considered as zero-rated supply. Any person making zerc
rated supply (ie. any exporter) shall
be eligible to claim refund under either of the following
options, namely:-
(a) he may supply goods or services or both u
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filed only after the export manifest or an export report, as the
case may be, is delivered under
section 41 of the Customs Act, 1962 in respect of such goods.
For the option (b),the shipping bill filed by an exporter shall be deemed to be an application for
refund of integrated tax paid
on the goods exported out of India and such application shall be
deemed to have been filed only
when the person in charge of the conveyance carrying the export
goods duly files an export manifest
or an export report covering the number and the date of
shipping bills or bills of export
and the applicant has furnished a valid return.
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For both option (a) and (b) exporters have to provide details of GST invoice in the Shipping bill.
ARE-1 which is being
submitted presently shall be dispensed with except in respect of
commodities to which provisions of
Central Excise Act would continue to be applicable.
XIV. Change in export Procedures:
Electronic as well as manual Shipping Bill
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epartment. Suitable circular in this regard would be issued. Until then the
extant instructions on the
issue may be followed.
Note: The above guidance note should not be used in anyquasi-judicial or judicial proceedings,
where only the relevant legal
texts need to be referred to.
Document 9
ANNEXURE-I
Case 1.-Where product attracts IGST but not CVD
Suppose Assessable Value (A.V.) including landing charges Rs. 100/-
(1)
BCD-10%
(2)
IGST-12%
(3)
Education cess – 2%
(4)
Higher education cess-1%
In view of the above parameters, the calculation of duty would be as below:
(a)
BCD Rs. 10 [10% of A.V.]
(b)
Education cess- Rs. 0.2 [2% of (a)]
(c)
Higher education cess- Rs. 0.1 [1% of (a)]
(d)
IGST-Rs. 13.236 (A.V.+(a)+(b)+(c)]x12%
Case 2. Where product does not attract CVD but attract IGST as well as compensation cess
Suppose Assessable Value (A.V.) including landing charges Rs. 100/-
(1)
BCD-10%
(2)
IGST-12%
(3)
Education cess – 2%
(4)
Higher education cess -1
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–
(1) BCD-10%
(2) CVD-12%
(3) IGST-28%
(4) Education cess – 2%
(5)
Higher education cess -1%
(6) Compensation cess-10%
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In view of the above parameters, the calculation of duty would be as below:
(a)
BCD Rs. 10 [10% of A.V.]
(b)
CVD Rs 13.2 [12% of (A.V.+ BCD)
(c)
Education cess- Rs. 0.464 [2% of (BCD+CVD)]
(d)
Higher education cess- Rs. 0.232 [1% of (BCD+CVD)]
(e)
IGST Rs. 34.69 [A.V.+(a)+(b)+(c)+(d)]x 28%
(f)
Compensation cess – Rs. 12.389 [A.V.+(a)+(b)+(c)+(d)]x 10%
Note: In cases where imported goods are liable to Anti-Dumping Duty or Safeguard Duty,
calculation of Anti-Dumping Duty or Safeguard duty would be as per the respective notification
issued for levy of such duty. It is also clarified that value for calculation of IGST as well as
Compensation Cess shall also include Anti-Dumping Duty amount and Safeguard duty amount.
CBEC WEBSITE
Information guide on GST
www.cbec.gov.in
GSTN WEBSITE – www.gstn.org
GST COUNCIL WEBSITE – www.gstindia.co
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