Deemed export has been defined under Section 2(39) of CGST Act, 2017 as supplies of goods as may be notified under section 147 of the said Act. As per Sec 147 of CGST Act, the Government may, on the recommendations of the Council, notify certain supplies of goods as deemed exports, where goods supplied do not leave India, and payment for such supplies is received either in Indian rupees or in convertible foreign exchange, if such goods are manufactured in India.
Let us discuss in this article the Impact of GST on Buying / Selling a Used Vehicle. Since the transactions happen in different ways, broadly as below, we shall discuss the impact of GST accordingly. Individual Sells to Individual (C2C), Individual Sells to Un-registered Dealer (C2C), Individual Sells to Registered Dealer (C2B), Registered Dealer Sells to Any Buyer (B2B / B2C), Leasing of Vehicle, Exchange of Old Vehicle with New
Reverse Charge Mechanism which proved to be most Draconian provision has been now relaxed, of course temporarily till 31st March’ 2018, as per the decision taken at 22nd HST Council meeting on 6th Oct’2017
There was great Euphoria, Enthusiasm & Excitement in Export Community when a flash news thrashed in the media after the 22nd meeting of GST Council on 6th October 2017 that recommended release of Refunds and other beneficial proposals for exporters as a boon for them and to normalize the working of exporters and to ensure the inflow of foreign exchange for the exchequer.
The 22nd meeting of the Council comes on the back of promises made by Prime Minister Narendra Modi on Wednesday (4th Oct, 2017) that the government was committed to removing the glitches and bottlenecks of the GST regime. Accordingly the GST Council, in its 22nd Meeting which was held on 6th Oct, 2017 in the national capital under Chairmanship of the Union Minister of Finance and Corporate Affairs, Shri Arun Jaitley has recommended the following facilitative changes to ease the burden of compliance on small and medium businesses:
Now in supersession of Notification No. 16/2017 – Central Tax dated 7th July, 2017, a fresh Notification No. 37/2017 – Central Tax dated 4 th October, 2017 has been issued which extends the facility of LUT to all exporters under rule 96A of the Central Goods and Services Tax Rules, 2017.
While conceptualizing concept of GST, a 3600 view of business and economy was considered specially the nature of business and requirements of almost five crore Micro, Small and Medium Enterprises (MSMEs) and small traders who account for 25% of employment, 40% of industrial output and 45% of exports of the country. To boosting the cost competitiveness of MSMEs and small traders and for simple compliance, Composition scheme a simple and easy scheme was introduced. The scheme helps small taxpayers get rid of complex GST formalities and pay GST at a fixed rate of turnover.
Issue – 1 : All Suppliers to SEZ Units / SEZ Developers Need to Compulsorily Register under GST- Supplies to SEZ Units / SEZ Developers is treated as Inter-State Transaction as per provisions of Sec 7(5) of IGST Act, 2017. Therefore all such suppliers are Compulsorily Registration under GST irrespective of their Turnover as per Sec 24 of CGST Act.
Defining export of service has been very tricky due to intangible nature of service transaction and contradictory provisions in GST Law. Due to this nature of services, there has been constant confusion regarding meaning of export of services and its ramifications in various types of transactions. Let us discuss here one such case of supply of services to SEZ unit / SEZ Developers.
Merchant exporters are instrumental in a boosting of country’s exports especially exports from MSME and small manufacturers. As per Foreign Trade Policy, Para 9.33 Merchant Exporter means a person engaged in trading activity and exporting or intending to export goods.
