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EXPORT PROCEDURE UNDER GST

GST Composition Scheme

CBEC has recently issued circular no. 26/2017 dated 1st July, 2017 to clarify the export procedure under Goods and Service Tax (GST). As GST is now effective, it’s important to aware about the steps to be taken for export of goods in compliance with GST otherwise it may result into loss of revenue. The article explains the GST provisions in simple language to make export procedure – Yes GST Compliance. 

Let’s first understand what is export of goods / services as per GST?

  1. As per Sec. 2(5) of IGST Act 2017, Export of goods means taking goods outside India to a place outside India.
  2. As per Sec. 2(6) of IGST Act 2017, Export of services means the supply of service when,-
  1. The Supplier of service is located in India;
  2. The recipient of service is located outside India;
  3. The place of supply of service is outside India;
  4. The payment for such service should be received in convertible foreign exchange;
  5. The supplier of service and the recipient of service are not merely establishments of a distinct person.

Under GST, Export of goods and services will be called Zero rated supply. Supply made to SEZ will be considered as zero rated supply. However Supply made to EOU will not be considered as an export, hence tax be levied on supply made to an EOU.

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OPTION – I : Export under Bond or LUT without payment of IGST:

1.

Form GST RFD – 11

Any registered person availing this option to supply goods or services for export without payment of IGST shall before export furnish a bond or a LUT in form GST RFD-11.

2.

Furnish of GST RFD – 11 (Manually for temporary purpose as per latest circular)

GST RFD-11 shall be furnished on common portal (www.gst.gov.in).  However as there is issue in furnishing the GST RFD-11 online, as per recent notification issued, the exporter should download the form GST RFD-11 from www.cbec.gov.in and furnish it manually to the jurisdictional Deputy/Assistant commissioner

3.

Submit Details in GSTR-1

Kindly ensure to submit the details of export while filing GST Return – 1.

4.

Refund of Untilised Input Tax Credit

Refund of unutilized input tax credit can be claimed in GST RFD- 1.

 

OPTION – II: Export on payment of IGST:

1.

IGST will be first paid on export and subsequently refund of the IGST paid on such exports can be claimed.

2.

Submit Details in GSTR-1

Kindly ensure to submit the details of export invoice while filing GST Return – 1.

3.

Refund of IGST

  1. Goods:
  • Shipping bill filled by the exporter shall be deemed to be the application for refund of IGST paid on goods. Hence no separate application needs to be filled for refund.

 

  • Moreover such refund application will be considered valid only if person in charge of the conveyance carrying the export goods duly files an export manifest.

 

  • Refund of IGST paid on goods would be available if the applicant has furnished a valid return in form GSTR-3.

 

(B) Services

Refund for IGST paid on export of services shall be claimed in form GST RFD-01

 

Documents required for export:

The invoice for export shall also contain the following details:

  1. Name and address of the recipient;
  2. Address of delivery;
  3. Name of the country of destination

 

Moreover, invoice rules clearly stipulates that in case of export the invoice shall carry an        endorsement SUPPLY MEANT FOR EXPORT ON PAYMENT OF IGST or SUPPLY MEANT FOR EXPORT UNDER BOND WITHOUT PAYMENT OF IGST.

In addition, other documents under export like Shipping bills, Bill of lading and packing list will continue under GST.

Sealing of Containers:

The revised procedure for sealing containers will be effective form 01.09.2017. The procedure of sealing of containers by CBEC officials has been dispensed off. A future date has been prescribed since the returns under GST have been permitted to be filed by September 10 and also with the purpose to give enough time to the stakeholders to adapt to the new procedures.  Therefore, as a measure of facilitation, the existing practice of sealing the container with a bottle seal under Central Excise supervision or otherwise would continue.

Authored by CA Chintan Patel

chintan@nareshco.com

www.nareshco.com

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