GST implementation has no doubt given a boost to the export sector in India. Various statutory and procedural changes have been brought about by the authorities.
Read more in our article on the export of services: FAQs on Exports under GST
Among everything, here are 10 things that every exporter should know about export procedures under GST:
1.Quoting GSTIN in Shipping bill is mandatory if the export product attracts GST for domestic clearance. 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.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. Without GSTIN or PAN or UIN, the Shipping Bill cannot be filed.
2.Any registered person would not be required to file an application for refund of IGST. The Shipping Bill, having GST Invoice details would be deemed to be an application for refund of IGST paid on goods exported out of India.
3.There are two options for making exports – Export under Bond and subsequent claiming of refund of Input Tax Credit (ITC) and payment IGST on exports and subsequently claiming of refund.
4.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.
5.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. 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.
6. The bond shall be furnished on non-judicial stamp paper of the value as applicable in the State for which bond is being furnished. The exporters shall furnish a running bond, in case he is required to furnish a bond, in FORM GST RFD -11. The bond would cover the amount of tax involved in the export based on estimated tax liability as assessed by the exporter himself.
7.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.These composite rates are subject to certain conditions during the transition period that ensures that input credit /refund under GST and drawback of composite rates are not taken together for the export product.
8.The exporter has to produce a 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. In case exporter is unable to produce a 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 the time of export. The exporter can claim balance amount of drawback as a supplementary claim when he produces the certificate.
9.In the case of refund of tax on inputs used in exports, refund of 90% will be granted provisionally within seven days of acknowledgment of refund application. Remaining 10% will be paid within a maximum period of 60 days from the date of receipt of application complete in all respects. Interest @ 6% is payable if a full refund is not granted within 60 days.In the case of refund of IGST paid on exports, upon receipt of information regarding furnishing of valid return in Form GSTR-3 by the exporter from the common portal, the Customs shall process the claim for refund and an amount equal to the IGST paid in respect of each shipping bill shall be credited to the bank account of the exporter.
10. In the case of supply by an unregistered person (including unregistered job workers), the registered person i.e., the exporter shall be liable to pay GST under reverse charge mechanism. However, the exporter can avail ITC of such GST paid and either utilize the ITC or claim a refund of the same.
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