Goods and Services Tax – GST – By: – Subhash Modi – Dated:- 25-11-2015 Last Replied Date:- 30-12-1899 – Mr. Pradeep Jain has written a very informative article titled: PROPOSED REFUND PROCESS UNDER GST – HAPPINESS ON THE WAY TO EXPORTERS. In continuation I wish to add my comments on the issue of refund under GST as follows: However in the proposed GST legislation there is post refund condition that the value of the exported goods ought to be realised in free foreign exchange within the initial or extended time limit prescribed under FEMA,1999 which at present is condition only under the proviso to Section 75 of the Customs Act, 1962 read with the Rule 16A of the Customs, Excise Duties and Service Tax Drawback Rules, 1995 (effective 06-12-1995) qua the customs portion of the drawback and the Foreign Trade Policy qua the relief of input customs duties exemption for manufacture and export of the resultant product. Failure to realise the export value in foreign exchange entails (under the
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s vide Rule 19(2)/CEX Rules, 2002 read with Notification 43/2001-CE(NT) or 44/2001-CE(NT). d) State VAT or CST saved for purchase of goods ultimately exported under CST form H e) Input and final goods duties reliefs or exemptions availed by 100% EOUs, STPI and similar export oriented dispensations. f) Refund of accumulated credit under Rule 5 of the CCR, 2004. In other words such export related reliefs were never and are not still subject to recovery if the value of the relevant export goods is not realised in foreign exchange. Even in case of FEMA, Drawback Rules and the FTP it is provided that though failure to realise payment for export goods in foreign exchange will invite penalisation (under FEMA) or recoveries of drawback granted or duty exemption availed under the FTP such penalisation or recoveries will be waived if evidence is submitted that the credit insurance company (e.g. ECGC) have settled in India a claim against the non-realisation to the Indian exporter in Indian Rupee
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und or allowed to be retained for payment of SGST and CGST or IGST on any further domestic sale. The exported goods will be taxed in the country to which the export has taken place and goods are retained or consumed in that country. Can such goods be taxed again in India extra-territorially by way of recovery of the last point GST refund that was allowed on the occasion of export? Recovery will amount to taxing the goods again as if the goods are still in India and not exported. Goods can be taxed only if the goods are existing and available in India and not when existing and available or already consumed outside India. In the domestic front there is no condition that if the seller in India fails to realise his GST paid goods value from the buyer of his goods in India then he should refund the amount of GST that was paid or the purchaser should refund the amount of credit of GST that he had taken. If the GST is say around 22% then the exporter not only looses the value of goods because
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