Siraj A

Export will be treated as zero rated supplies. No tax will be payable on export of Goods or Services, however ITC will be available, and the same will be available as refund to the exporters. The exporter will have an option to either pay tax on the output or claim refund of IGST or export under bond without payment of IGST or claim refund of ITC.

Notification No: 15/2017 Integrated Tax [Rate] date 30.6.17

It exempts all goods or services or both imported by a unit or a developer in the SEZ, from the whole of the Integrated Tax leviable thereon U/s 7[3) of the Customs Tariff Act, 1975 for authorized operations.

Notification No: 18/2017 Integrated Tax [Rate] date 5.7.17

It exempts services imported by a unit or a developer in the SEZ for authorized operations, from the whole of the Integrated Tax leviable thereon U/s 5 of the IGST Act 2017.

As per Notification No: 16/2017 Central Tax date 7.7.17 a registered person can use Letter of Undertaking [LuT] for export. The notification says that LUT is available to registered person who is either [a] a status holder as specified in Foreign Trade Policy 2015-2020. [b] Has received the due foreign inward remittance amounting to a minimum of 10% of the export turnover, which should not be less than Rs 1 Cr, in the preceding financial year. [c] Has not been prosecuted for any offence where the tax evaded amount exceeds Rs 2.5 Cr. In case of a supply between a manufacturer and a merchant exporter, the manufacturer is liable to CGST/ SGST, but the merchant exporter has the option of bond/ LUT/ pay IGST.

Circular 2/2/2017GST & F. No 349/82/2017- GST date 4.7.17

The acceptance of the Bond/ LUT required to be furnished by the exporter under rule 96A shall be done by the jurisdictional Deputy/ Assistant Commissioner. These may be furnished manually in form GSTRFD11 till the module is available on the portal.

Circular 4/4/2017GST & F. No 349/82/2017- GST date 7.7.17

The exporters shall furnish a running bond [with debit/ credit facility], in case he is required to furnish a bond in GSTRFD11. The bond would cover the amount based on estimate tax liability as assessed by the exporter himself. If the bond amount is insufficient, the exporter shall furnish a fresh bond. The amount of bank guarantee [BG] furnished along with the bond may be decided by the jurisdictional Commissioner depending upon the track record of the exporter. If he satisfies bond without BG is enough. The BNG should not exceed 15% of the bond amount. The exporter is at liberty to file the bond/ LUT before the Central or State Tax authority.

Circular 5/5/2017- GST & F. No 349/82/2017- GST date 11.8.17

The bond shall be furnished on non-judicial stamp paper, while LUTs are generally submitted on the letterhead containing signature and seal of the person or the authorized person. LUT/ bond should be processed on most priority and should be accepted within a period of three working days from its submission date. The zero rating of exports, including supplies to SEZ, is allowed only with respect to supply by the actual exporter under LUT/ Bond or payment of IGST. The Commissioner may waive off the requirement to furnish BG taking into account the facts and circumstances of each case. This provision would be implemented liberally, for example an exporter registered with Export Promotion Council can be allowed to submit bond without BG on submission of a self-attested copy of the proof of registration with an Export Promotion Council. Documents submitted as proof of fulfilling the conditions of LUT shall be accepted unless there is specific information otherwise. For example, a self declaration by the exporter to the effect that he has not been prosecuted is sufficient.

As per Notification No 37/2017 Central Tax date 4.10.17 the provisions of above Notification No: 16117 shall tnotatis mutandis in respect of zero rated supply of goods or services or both made by a registered person [including s SEZ Developer or SEZ Unit] to a SEZ Developer or SEZ Unit without payment of integrated tax.

Export invoice contains the word “supply meant for export on payment of IGST” or “supply meant for Export under bond or letter of under taking without payment of IGST”. As per section 16 of the 1GST Act zero rated supply means any of the following taxable supply of goods or services [a] export of goods or services [b] supply of goods or services to SEZ developer or SEZ unit.

Electronic sealing of containers: new self sealing came into effect from 1.10.17. Exporters availing factory muffing- automatically entitled for self-sealing. All AEOs will be eligible for self sealing. This permission will be valid till withdrawn. Electronic seal shall be “RFID tamper proof one time bolt seal” and shall bear unique number.

Notification No 48/2017 central tax 18.10.17

The followings are deemed exports [1] Supply of goods against Advance Authorization. [2] Supply of goods against Export Promotion Capital Goods Authorization. [3] Supply of goods to an EOU. [4) Supply of gold by bank or PSU against Advance Authorization.

Notification No 49/2017 central tax 18.10.17

The followings are the documents to be produced by the supplier of deemed export supplies claiming refund [1] Acknowledgement by the jurisdictional tax officer that the said deemed export supplies have been received or a copy of the tax invoice duly signed by the recipient EOU. [2] An undertaking by the recipient of deemed export supplies that no ITC on such supplies has been availed by him. [3] An undertaking by the recipient of deemed export supplies that he shall not claim the refund in respect of such supplies and the supplier may claim the refund.

Notification No 41/2017 Integrated Tax [Rate] 23.10.17

The above notification exempts the inter-state supply of taxable goods by a registered supplier to a registered recipient for export, from so much of the integrated tax leviable thereon under sec 5 of the IGST Act, as is in excess of the amount calculated at the rate of 0.1% subject to the fulfillment of the following conditions,

[i] the registered supplier shall supply the goods to the registered recipient on a tax invoice

[ii] the recipient shall export the same within a period of 90 days from the invoice date

[iii] the recipient shall indicate the GSTIN and invoice number in the shipping bill

[iv] the recipient shall be registered with an Export Promotion Council or a Commodity Board recognized by the Commerce Department

[v] the recipient shall place an order on supplier for procuring goods at concessional rate and a copy of the same shall also be provided to the jurisdictional tax officer

[vi] the recipient shall move the said goods from the place of the supplier (a) directly to the port, container deport, airport or customs station, (b) directly to a registered warehouse from where the said goods shall move to the port, container deport, airport or customs station

[vii] if the recipient intends to aggregate supplies from multiple suppliers and then to export, the goods from each supplier shall move to a registered warehouse and after aggregation the recipient shall move goods to the port, container deport, airport or customs station

[viii] in the above [vii] case, the recipient shall endorse receipt of goods on the tax invoice and also obtain acknowledgement of receipt of goods in the registered warehouse from the warehouse operator and the endorsed tax invoice and the acknowledgement shall be provided to the supplier as well as to the jurisdictional tax officer of the supplier

[ix] when the goods have been exported, the recipient shall provide a copy of shipping bill or bill of export containing GSTIN and tax invoice of the supplier along with proof of export general manifest or export report have been filed to the registered supplier as well as the jurisdictional tax officer of such supplier.

The supplier shall not be eligible for the above mentioned exemption if the registered recipient fails to export the said goods with in a period of 90 days from the date of invoice.

REFUND- Sec 54, Rule 89

Sec 54 provides that refund of excess tax and interest or any other amount paid can claimed before the expiry of two years from the relevant date. No refund of unutilized IPT shall be allowed in cases other than zero rated supplies made without payment of tax and where the credit has been accumulated on account of rate of tax on inputs being higher than the rate of tax on output supplies (other than nil rated or fully exempt supplies). Application form is GSTRFD01 which shall be accompanied by any of the following

[a] shipping bill/ export invoice

[b] bank realization certificate/ foreign inward remittance certificate for export of services

c] copy of order passed by the proper officer/appellate authority

d] a statement containing the number and date of invoices with endorsement in case of SEZ/ SEZD, a declaration to the effect that they has not availed the IPT.

e] a statement containing the number and date of invoices received and issued where the credit has accumulated due to inverted tax structure

f] copy of order if the refund order arises due to finalization of provisional assessment.

g] a statement showing infra state supply and interstate supply which inter changed

h] a statement showing excess payment of tax

i] a declaration if the amount does not exceed Rs 2 lakhs- not required if refund is u/s 54. 8. a to f.

j] annexure 2 of GSTRFDO1 is to be issued by a Chartered Accountant if the amount exceeds Rs 2 lalchs- not required if refund is u/s 54.8. a to f.

A registered person who has defaulted in filing of return and payment of tax, interest, penalty which has not been stayed, the proper officer may with hold payment of refund until he has furnish the same or deduct the same from the refund amount. Its acknowledgment is in form GSTRFDO2 and notice for rectification is in GSTRFD03 and the order is in GSTRFDO4 [within 60 days from the date of receipt of application] and payment advice is in OSTRFD05.

In case of zero rated supply the refund of ITC shall be granted as per the formula., Refund amount = [turnover of zero rated supply of goods + turnover of zero rated supply of services] x net ITC / adjusted total turnover.

In case of zero rated supplies and inverted tax structure, refund of unutilized ITC can be claimed. In case of zero rated supplies advance refund of 90% can be granted, A person claiming refund has to prove that he is not enriching himself unjustly by passing on the incidence of tax. If the incidence of tax has been passed by the applicant to some other person then the tax or other amount which is otherwise refundable shall be credited to Consumer Welfare Fund. U/s 54(12) the taxable person shall be entitled to interest ® 6%.


This a only a training material mainly based en the provisions CGST Act 2017. Personals are advised to go through the laws for statutory compliances. It is only for awareness and not for any legal interpretation of laws. Siraj, IAC (I), SGST Department, Aluva

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November 2020