Exporter Compliance under GST
Hello all, today in this post we are going to talk about Exporter Compliance under GST.
1. WHO CAN CLAIM GST REFUND?
- Excess GST paid due to mistake
- Exports of goods or services
- Supplies to SEZ units and developers
- Deemed exporters
- Refund of Pre-Deposits
- Refund of accumulated input tax credit on account of inverted duty structure
- Refund of taxes on purchase made by the UN or embassies
- Finalization of provisional assessment
- Refund arising on account of Judgement , Decree, Order or direction of the Appellate authority
2. HOW TO CLAIM GST REFUND?
3. GST REFUND FOR DEEMED EXPORTERS:
It is recommended that the deemed export need to be treated on equal footing as export and the similar provision as detailed above for actual exports of goods or services would be applicable except the following:
a) The supplier of final goods, in the course of deemed export, will pay the IGST on his supplies and can claim refund, only if, the IGST amount has not collected from the recipient. It is also required to be verified that the recipient has not availed the input tax credit in respect of such supplies
b) The supplier may file a simple refund application along with a Chartered Accountant’s Certificate certifying the fact of non-passing of the GST burden by him, being claimed as refund. GST Law Drafting Committee may prescribe a threshold amount below which self-certification (instead of CA Certificate) would be sufficient
c) The recipient unit would be eligible for refund of IGST, if it has actually paid IGST at the time of obtaining goods / services from the domestic supplier. In no case, both the supplier and the recipient unit can obtain refund at the same time in respect of the same transaction. A suitable validation to block such double claim should be built in the GSTN /refund processing backed system
d) Such recipients may not be registered under GST regime and therefore they would have to submit copies of all the invoices, etc. in case claim of refund is filed by them.
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4. INVOICING FOR EXPORTS:
The invoice rules clearly stipulates that in case of exports, 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 and among other details shall also contain:-
(i) Name and address of the recipient,
(ii) Address of Delivery,
(iii) Name of the Country of Destination, and
(iv) Number and date of application for removal of goods for export [ARE-1]
5. WHAT DO U MEAN BY ZERO RATED SUPPLY??
“Zero-Rated Supply” means supply of any goods and/or services in terms of Section 15 of the IGST Act 2016;
Let us see what Section 16 of IGST Act, 2016 says about zero rated supply.
16(1) “Zero Rated Supply” means any of the following taxable supply of goods and/or services, namely-
(a) export of goods and/or services; or
(b) supply of goods and/or services to a SEZ developer or an SEZ unit.
6. DOCUMENTS REQUIRED TO BE ENCLOSED FOR REFUND OF GST TO EXPORTER:
It is recommended that the following documents are required to be submitted to obtain refund of GST to exporters:
1. Export Promotion Copy of Shipping Bill
2. Mate’s Receipt / Transporter’s Challan (in case of export by road);
3. Export invoice;
4. Packing list;
5. Bill of Lading/ Airway Bill;
6. Bank Realization Certificate (BRC)
The documents mentioned above are required to be enclosed to obtain GST refund to exporter against their payment of inputs on exported goods.
7. IN WHAT CASE CERTIFICATE FROM CHARTERED ACCOUNTANT / COST ACCOUNTANT IS REQUIRED?
8. WITH IN HOW MANY DAYS GST REFUND WOULD BE PASSED TO THE EXPORTER?
90% refund of integrated GST paid on exports would be granted with in 7 days and the balance with in 60 days .
The GST refund would always arise in case export of goods & services is done without submission of Bond /LUT and IGST has been paid on exports
GST council meeting extends tax exemptions to exporters
The 26 th meeting meeting of the GST Council held Saturday decided to extend the available tax exemptions on imported goods for a further 6 months beyond March 31.
As per the decision, exporters presently availing various export promotion schemes can now continue to avail such exemptions on their imports up to October 1, , by which time an e-Wallet scheme is expected to be in place to continue the benefits in future.
In a related development which would benefit the exporters, the Council reviewed the progress in grant of refunds to exports of both IGST and Input Tax Credit.
The Council appreciated that the pace of grant of IGST refund has picked up.
Thereafter, the Council directed GSTN to expeditiously forward the balance refund claims to the Customs/Central GST/State GST authorities, as the case may be, for their immediate sanction and disbursal.
In its meeting held on October last year the Council had noted that exporters are experiencing difficulties of cash blockage on account of having to upfront pay GST / IGST on the inputs, raw materials etc. / finished goods imported / procured for purposes of exports
PRECAUTIONARY INFORMATION WHICH EVERY EXPORTER SHOULD REMEMBER:
GSTIN / PAN and Invoice information in Shipping Bill:
1. Quoting GSTIN in Shipping bill is mandatory if the export product attracts GST for domestic clearance.
2. Quoting PAN (Permanent Account Number), which is authorized as Import Export code by DGFT, would suffice if the exporter exclusively deals with products which are either wholly exempt from GST or out of GST regime.
3. In case of exports by specialized agencies such as United Nations Organization or notified Multilateral Financial Institutions, Embassies and Consulates, the exporter can quote Unique Identity Number, instead of GSTIN, in the Shipping bill.
4. Without GSTIN or PAN or UIN, the Shipping bill cannot be filed.
5. The claim for refund of IGST paid or Input Tax Credit on inputs consumed in goods exported cannot be processed without GSTIN and GST Invoice details in Shipping Bill.
6. Commercial Invoice information should be provided in the Shipping Bill. Wherever Commercial Invoice is different from Tax Invoice, details of both have to be provided in the Shipping Bill.
7. Taxable value and Tax amount should be mentioned against each item in the Shipping bill for processing the refund amount. Multiple tax invoices issued by same GSTIN holder are allowed in one Shipping bill for the same consignee.
8. State code is part of GSTIN numbering scheme. However, in the Shipping Bill for the field “State of origin” declare the State code from where export goods originated as it was being done before.
1. For a transition period of three months i.e. 1.7.2017 to 30.9.2017, composite rates of All Industry Rate (AIR) drawback are available to exporters.
2. These composite rates are subject to certain conditions during transition period that ensure that input credit /refund under GST and drawback of composite rates are not taken together for the export product.
3. Exporter has to produce certificate from jurisdictional GST officer to avail composite rate. This requirement is applicable to supplies for export made on or after 1.7.2017, as all exporters are required to operate under GST from that date.
4. The requirement of certificate is not a new requirement. All registered persons who were exporting under bond or on claim for rebate were producing such certificate prior to 1.7.2017 also.
5. In case export goods have been cleared from the factory or warehouse etc. prior to 1.7.2017 but let export order has not been given till 30.6.2017, certificate from GST officer is not required. For such goods, only a declaration from exporter or certificate from the then Central Excise officer as applicable is required.
6. In case exporter is unable to produce requisite certificate for claiming composite AIR at the time of export, then exporter should have the Shipping bill amended to claim lower AIR (Customs portion) at time of export. The exporter can claim balance amount of drawback as supplementary claim when he produces certificate.
7. Instructions issued to all jurisdictional authorities to ensure smooth clearance of export consignments
Exporter Compliance under GST
In case you are confused about GST, feel free to consult the GST experts at ItsLyf. Also contact for comprehensive assistance with GST Registration and GST Return Filing by email us at firstname.lastname@example.org
Prakrati Jindal (Team ItsLyf)
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