CA M.L Rajoria & CS Riti Goyal
Implementation of GST had brought in a lot of compliances for the registered exporters. Although the announcements for refund has been made by Government, but the process has still not yet started in a full- fledged manner. This has resulted into blockage of the working capital of the registered exporters. However, here is the good news for the exporters, as Government announced concession to the registered exporters vides:
1. Notification No: 40/2017-Central Tax (Rate) dated: 23rd October, 2017: By this notification it provides that the registered exporter/ recipient can make intra state purchase of taxable goods from a registered supplier by paying GST @0.05%.
2. Notification No. 41/2017-Integrated Tax (Rate) dated: 23rd October, 2017: By this notification it provides that the registered exporter/ recipient can make inter -state purchase of taxable goods from a registered supplier by paying GST @0.1%.
But in order to avail these exemption there are conditions which needs to be fulfilled. They are as follows:
1. The registered supplier shall supply the goods to the registered recipient on a tax invoice;
2. The registered recipient shall export the said goods within a period of ninety days from the date of issue of a tax invoice by the registered supplier;
3. The registered recipient shall indicate the Goods and Services Tax Identification Number of the registered supplier and the tax invoice number issued by the registered supplier in respect of the said goods in the shipping bill or bill of export, as the case may be;
4. The registered recipient shall be registered with an Export Promotion Council or a Commodity Board recognized by the Department of Commerce;
5. The registered recipient shall place an order on registered supplier for procuring goods at concessional rate and a copy of the same shall also be provided to the jurisdictional tax officer of the registered supplier;
Flow chart for Purchase:
The movement of the goods can take place in two ways:
1. The registered recipient shall move the goods from the place of registered supplier to the port, inland container depot, air land or land customs station from where the goods are to be exported.
2. The registered recipient shall move the goods from the place of registered supplier to a registered warehouse from where the said goods shall be move to the port from where they will be exported.
Flow chart for Export :
Aggregation of supplies:
If the registered recipient wants to aggregate the supplies from multiple supplier and then export:
1. The goods from each registered supplier should reach the warehouse.
2. Thereafter aggregation will take place.
3. After aggregating the goods the registered recipient shall move the goods to the container Depot, Port from where they are to be exported.
Conditions to be fulfilled for aggregation of supplies:
1. The registered recipient shall endorse receipt of goods on the tax invoice.
2. An acknowledgement from the warehouse operator needs to be obtained.
3. Both of these (endorsed tax invoice and acknowledgement shall be provided to the registered supplier and jurisdictional officer).
Documents to be furnished by the registered exporter when goods have been exported:
1. Shipping bill/ Bill of export containing details of Goods and Services Tax Identification Number(GSTIN)
2. Tax invoice of the registered supplier
3. Proof of export general manifest or export report.
All of these documents need to be filed by the registered exporter to the registered supplier and jurisdictional tax officer.
The meaning of registered warehouse has not been defined in the GST Act. In our opinion,
Registered Warehouse is:
1. If the registered recipient is storing the goods in his own warehouse. In this case, the warehouse here refers to the additional place of business declared by the recipient in the GST portal. And in this case the unique identification number here refers to the GSTIN .
2. If the registered recipient is storing goods in third party’s warehouse:
a. Either such warehouse operator can be registered .
b. Else he can be un-registered.
If a warehouse operator is un-registered, as per the provisions of GST Act, he can register himself by filing form GST ENR-01 on the GST common portal. After registration he will be provided with the unique identification number.
One of the pre- conditions to claim this exemption is that the exporter needs to be registered under the Ministry of Commerce and Industry. The Ministry of Commerce and Industry has notified different registration for different trades. Depending upon the type of trade, the registration procedures have been designed by it. Refer the link for more details on registration: http://commerce.gov.in/InnerContent.aspx?Id=6
For the time-being Government has provided with the exemption as mentioned above. But very soon the Government is also to launch e-wallet facility for the exporters. By which an advance refund mechanism will be provided to the exporters. Refunds can be used to off-set against this advance refund.
With the implementation of all these policies for exports under the GST regime, Government has been trying to incorporate “Make in India”.
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