03 July 2017

Export procedures revised under new GST regime

With the implementation of Goods and Services Tax (GST) in India from 1st of July, 2017, Indian authorities have revised procedures relating to export of goods and services from India. Amendments have been made in various Rules and Regulations relating to exports and imports, in order to align them with the new provisions of GST law.

Circular No. 26/2017-Cus, dated 1-7-2017 has been issued in this regard by the CBEC to explain certain changes in the export procedures, particularly with respect of claiming refund of taxes or duties paid on export goods or inputs used in export goods. It may be noted that ARE-1 procedure which was being followed in Central Excise law earlier has been dispensed with, except in respect of certain commodities on which are still covered under the said law.


Zero rated supply

Exports in the new regime have been categorised as “zero rated supply”, and hence duties or taxes paid either on inputs/input services or on final products, are to be refunded. The new regime hence provides for two options for making exports – Export under bond followed by refund of Input Tax Credit (ITC), or payment of Integrated Goods and Services Tax (IGST) and then refund of same.


Export under Bond

Central Goods and Services Tax Rules, 2017 have been amended to incorporate new Rule 96A providing for refund of Integrated tax (IGST) paid on export of goods or services under bond or Letter of Undertaking. Any registered person availing this option has to furnish, prior to export, a bond or a Letter of Undertaking in FORM GST RFD-11, while details of the export invoices contained in FORM GSTR-1 furnished on the common portal by the exporter would be electronically transmitted to Customs and a confirmation of export from them would be electronically transmitted to the GST common portal. It may be noted that these provisions will also be applicable when goods or services are supplied to a unit or developer in Special Economic Zone (SEZ).

The exporter claiming ITC refund has to file an application electronically along with certain documents after the export manifest or an export report is delivered to him in respect of exported goods.


Refund of Integrated GST

Any registered person would not be required to file any application for refund of Integrated Goods and Services Tax (IGST) paid on supply of goods for exports. The Shipping Bill, having GST invoice details would be deemed to be an application for refund of integrated tax paid on the goods exported out of India. Such application would be deemed to have been filed when the person in charge of the conveyance carrying the export goods files an export manifest or an export report covering the number and the date of shipping bills. 



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