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
 Job Work on intimation and against Challan
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 electronic declaration to be filed within 90 days
from the appointed date.
Provided
 Credit is available both under earlier law and GST law
and credit is reflected in the Return for the period
ending appointed date.
Transitional Provision (Contd..)
 Credit is available to regular tax payer .Those under
composition scheme not eligible
 Closing stock to be used for taxable supplies
 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 Central
and State/U T
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
foreign exchange and
v. Supplier and recipient of services are distinct persons
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
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
Exports availing exemption from
IGST
Refund , in case of exports under Bond/LUT , as per the
formula :
 Refund Amount = (Turnover of zero-rated supply
of goods + Turnover of zero-rated 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 relevant
period;
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.
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
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 90,000
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
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 days till the date of refund
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
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 Bank
Realization Certificates or Foreign Inward Remittance
Certificates, as the case may be
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 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
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, sanctioning the balance
amount
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 transaction: 8 digit
 Services as per Standard Accounting Code(SAC)
 Additional work for recipient if fall under higher
category
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 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
ADVANCE AUTHORISATION
 Advance authorization may provide exemption from
basic customs duty, anti-dumping duty, safeguard duty
and transition product specific safeguard duty and
anti-subsidy 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
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
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 .
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 Exports
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 54 (3) of
CGST Act
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
DUTY DRAWBACK
 Facility of All Industry Drawback and Brand Rate
Drawback to continue
 Drawback to provide refund of only basic customs
duty. New Rates to be announced before 1st July ,2017
 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
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 the arrival of cargo is prior to 1st July , it will be
treated under pre GST regime.
 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 provision s of existing law provided the amount
has not been carried forward
TRANSITIONAL ARRANGEMENTS
( Contd..)
 Existing Drawback facility to continue in the transtion
period. Likely to be for 3 months.
 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
Misc.. Issues
 Ocean/Air freight on exports : Where location of
supplier of service and recipient both are in India , as
section 12(8) of IGST , the place of supply will be location
of the recipient . Thus taxable . If the supplier of service is
not registered in India as per section 13(9) of IGST the
place of supply shall be the place of destination of goods ,
thus non taxable
 Advances : Advance by a foreign buyer exempt from IGST
but advance from a Merchant to manufacturer in India
subject to GST
Misc.. Issues (Contd..)
 Commission to Foreign Agent : Covered under
the definition of “intermediary services ”.As per
POS rules , the location of supplier being outside
India , non taxable under GST.
 Participation in Overseas Fairs/exhibition .
Conference etc : Place of supply is the place
where event is actually held . Being outside the
taxable territory , non taxable under GST.
THANK YOU