EXPORTS &IMPORTS IN GST REGIME Dr Ajay Sahai Director General &CEO DG&CEO (FIEO) Positives for Exports Zero Rating of Exports including supply to SEZ Final goods/ services exports by a supplier exempted from IGST Imports by SEZ exempted from IGST CST integrated into IGST eligible for ITC

refund ITC Refund for non GST exports Unjust enrichment not applicable for exports Self declaration facility for exporters irrespective of refund amount DG&CEO (FIEO) Transitional Provision Credit of Central Taxes merged in CGST to be credited in the CGST A/C while State taxes in SGST A/C For Inputs from EOU/EHTP, credit as per 3(7)

of CENVAT The to be filed within 90 days from the appointed date. Credit is available both under earlier law and GST law and credit is reflected in the Return for the period ending appointed date. DG&CEO (FIEO) Transitional Provision (Contd..) Closing stock to be used for taxable supplies Credit is available to regular tax payer those under composition scheme not eligible The date of invoice or any other duty paying document within 12 month from the date of

transition A registered person , not registered under earlier law , if no having duty paying document , input tax credit to be granted at 60% of the rate of the product , if the rate is 9% or more else 40% both for DG&CEO (FIEO) Inter State Supply Exports treated as Inter State supply

subject to IGST Imports treated as Inter State supply subject to IGST Supply to SEZ (within State) Unit/Developer treated inter State supply subject to IGST Sales to Foreign tourist treated as Inter State supply subject to IGST Each SEZ unit , a business vertical DG&CEO (FIEO) 8 digit Harmonisation Turnover upto Rs 1.5 Cr : No digit

Turnover Between Rs 1.5 Cr to Rs 5 Cr : 2 digit Turnover above Rs 5 Cr : 4 digit Exports/ Imports transactions : 8 digit Services as per Standard Accounting Code(SAC) Additional work for recipient if fall under higher category DG&CEO (FIEO) DEFINITION OF EXPORTS Exports of goods means taking goods out of India to a place outside India

Export of supply means supply of service when : i. Supplier of services is located in India ii. Recipient of services is located outside India iii. Place of supply of service is outside India iv. Payment for such service is received in convertible v. foreign exchange and Supplier and recipient of services are distinct persons DG&CEO (FIEO) ZERO RATED SUPPLY Zero Rated Supply: Such supply an exempted supply but

credit of Input tax would be available on such supply. Zero Rated Supply includes supply of goods or services or both by A. Exports of goods or services or both B. Supply of Goods or services or both to a SEZ developer or a unit DG&CEO (FIEO) ZERO RATED SUPPLY Person making Zero Rated Supply can opt for (Section 16(3) IGST) a) Supply of goods or services or both under bond or LUT without payment of IGST

and claim refund of unutilized ITC b) Supply of goods or services or both on payment of IGST and claim refund of such tax paid on goods & services or both supplies DG&CEO (FIEO) Exports availing exemption from IGST Refund , in case of exports under Bond/LUT , as per the formula : Refund Amount = (Turnover of zerorated supply of goods + Turnover of zerorated supply of services) xNet ITC Adjusted Total Turnover Where,(A) "Refund amount" means the maximum

refund that is admissible; (B) (B) "Net ITC" means input tax credit availed on inputs and input services during the DG&CEO (FIEO) Exports availing exemption from IGST ( Contd) (C) "Turnover of zero-rated supply of goods" means the value of zero-rated supply of goods made during the relevant period without payment of tax ; (D) "Turnover of zero-rated supply of services" means the value of zero-rated supply of services made without payment of tax (E) "Adjusted Total turnover" means the turnover in a State or a Union territory, excluding the value of

exempt supplies other than zero-rated supplies, during the relevant period; (F) Relevant period means the period for which the claim has been filed. DG&CEO (FIEO) Illustration for a company A in Maharashtra availing exports under Bond/LUT Turnover of company A in Maharashtra in July 2017 : Rs 10,00,000 Turnover of zero rated supply, without payment of tax in July 2017 : Rs 6,00,000 Turnover of exempt supply in July 2017 : Rs 1,00,000

ITC availed in July 2017 : 50,000 Refund amount = (Rs 6,00,000) x (Rs 50,000) / (Rs 10,00,000 Rs 1,00,000 ) = Rs 33,333 DG&CEO (FIEO) Illustration for a company A in Maharashtra paying IGST on exports Supply value of exports goods : Rs 5,00,000 IGST on export product : 18% IGST payable on supply : Rs 90,000 ITC availed : Rs 40,000 Net IGST paid

: Rs 50,000 Refund : Rs 50,000 DG&CEO (FIEO) Refund for Exports Exports not subject to Export Duty Claim to be filed within expiry of 2years from the relevant date of exports Relevant date based on mode of transportation ; different for services exports Proof of realization not required for

merchandise exports but necessary for services exports DG&CEO (FIEO) Fast Refund for Exports Acknowledgement for refund for exports to be issued within 3 days 90% of the Refund amount to be granted provisionally within 7 days . Balance 10% on due verification of documents within 60days. Cases delayed beyond 60 days to get interest at the notified rate, not exceeding 6%, till the date of refund

Cases decided by Appellate or Adjudicating authority or Court, to get interest at the notified rate, not exceeding 9 %, reckoned from the 6o DG&CEO (FIEO) Fast Refund for Exports (Contd..) Eligibility for Provisional Refund : Exporter claiming refund should not been prosecuted for tax evasion > Rs 2.5 Crore in past 5 years Exporter s GST compliance rating not less than 5 on a scale of 10 No pending appeal , review or revision on the amount of refund

DG&CEO (FIEO) Refund Procedure Goods exports : A statement containing the number and date of shipping bills and the number and date of relevant export invoices. Services Exports : A statement containing the number and date of invoices and the relevant details of Bank Realization Certificates or Foreign Inward Remittance Certificates, as the case may be DG&CEO (FIEO)

Refund Procedure ( Contd..) Where the application relates to refund of input tax credit, the electronic credit ledger shall be debited by the applicant in an amount equal to the refund so claimed. The application for refund (GST RFD01)to be forwarded to the proper officer who shall, within three days of filing of the said application issue an acknowledgement in FORM GST RFD-02 Shipping Bill no and date and EGM details mandatory for goods exports. BRC /FIRC DG&CEO (FIEO)

details mandatory for service exports Refund Procedure ( Contd..) The officer to make an order in FORM GST RFD-04, sanctioning the amount of refund on a provisional basis within a period not exceeding seven days The officer to issue a payment advice in FORM GST RFD-05 to be electronically credited to any of the bank accounts of the applicant as given in registration particulars as specified in the application . Balance 10% to be given after scrutiny of documents in FORM GST RFD-06,

DG&CEO (FIEO) sanctioning the balance amount Job Work Principal (Exporter) may send inputs or capital goods, without payment of tax, for job work The intimation letter to contain description of inputs to be sent and nature of processing to be carried by job worker The intimation to be submitted to the jurisdictional officer by email or physical copy of letter The exporter may retain the credit availed by

him on the inputs/capital goods sent to job DG&CEO (FIEO) worker Job Work . contd. The job worker after processing can send the goods to another job worker or send to any place of business of the exporter or exports outside India without payment of tax Value addition will be subject to GST to

enable job worker to claim ITC Inputs to be brought back after completion of job work within one year (3 years for capital goods) Else credit to be reversed by the Exporter DG&CEO (FIEO) ADVANCE AUTHORISATION Advance authorization may provide exemption from basic customs duty, antidumping duty, safeguard duty and transition product specific safeguard duty and antisubsidy duty No exemption from IGST on import of inputs under the instrument IGST may be claimed as input tax credit

Drawback on inputs not covered under advance authorisation to get refund of basic customs duty DG&CEO (FIEO) DFIA Since Scheme provides exemption from basic customs duty only, no changes will be warranted in the GST Regime Instead of ACD/SAD, the authorisation holder shall pay IGST and claim the same as input tax credit The provision of drawback on inputs not covered under DFIA will cover only refund of

basic customs duty DG&CEO (FIEO) EPCG SCHEME EPCG Scheme to provide only exemption from basic customs duty Payment of IGST on such imports to be available as ITC Since IGST on capital goods would be immediately available as ITC, as against ACD utilization over 2 years, some relief would be available The export obligation link with duty saved amount needs to be relooked into as duty saved would be

only basic customs duty CG definition needs to be aligned . DG&CEO (FIEO) DEEMED EXPORTS Categories of deemed exports under Chapter 7 will be notified by the Government on the recommendation of GST Council as per Section 147 of CGST Act Deemed exports are not zero rated supply No exemption from GST on the supplies categorised as deemed exports. However, refund would be available on such supplies. Deemed exports benefit to be available only

to the recipient and not to supplier No disclaimer facility to claim Deemed DG&CEO (FIEO) EOUs Exemption to EOUs to be restricted to basic customs duty Imports by EOUs would be subject to IGST Supplies to EOUs/EHTP/STP may be classified as deemed exports ? Such refund to be available to the recipient unit No concessional duty on DTA sale. Full IGST/CGST/ SGST to be paid on such sale No restriction on DTA sale for goods but

restriction of 50% of FOB value remains on Services Accumulated credit of GST eligible for refund u/S DG&CEO (FIEO) Treatment of Scrips/Transferable authorization Such scrips to be used only for payment of basic customs duty IGST on imports will have to be paid in cash Utilization of scrips may be restricted affecting its premium

Supply of scrips may be subject to GST unless exempted as a Security Scrips may be provided an extended validity and utilize for payment of composition fee etc. by DGFT DG&CEO (FIEO) DUTY DRAWBACK Facility of All Industry Drawback and Brand Rate Drawback to continue Drawback to provide refund of only basic customs duty. For specified petroleum products, both basic customs duty and central excise duty

Embedded tax in supplies not being neutralized to affect competitiveness in exports Mechanism to provide relief to small exporters procuring goods from unregistered units or under composition limit to suffer burden of input tax credit DG&CEO (FIEO) TRANSITIONAL ARRANGEMENTS Any import of goods & services made on or after the appointed date (1st July, 2017) shall be liable to IGST on imports If tax on such services imports paid in full under the existing law , no IGST to be levied .If part paid , IGST on pro-rata basis to

be levied Refund claims filed after the appointed day of duty /tax paid under the existing laws for exports made before or after the appointed date to be disposed off in accordance with the DG&CEO (FIEO) provision s of existing law provided the TRANSITIONAL ARRANGEMENTS ( Contd..) Existing Drawback facility to continue in the transtion period All existing authorisations/scrips issued undr FTP to follow new GST provision from the

appointed date irrespective of the exemption provided under the existing taxes/duties DG&CEO (FIEO) THANK YOU For any query: email at [email protected] DG&CEO (FIEO)

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