1. GST India 2017: Exporters need not pay IGST if bond furnished

GST India 2017: Exporters need not pay IGST if bond furnished

Exporters can furnish bond or letter of undertaking instead of paying Integrated GST at the time of exporting goods and services with effect from July 1.

By: | New Delhi | Published: July 3, 2017 10:09 PM
GST, IGST, IGST news, GST on exports, Customs circular, latest Customs circular on export procedure, latest export procedure, Customs circular on export procedure in the GST regime, IGST Act, Zero Rated Supply, unutilised input tax credit, IGST refund In case the IGST has been paid, the exporters can seek refund of the tax paid, according to a Customs circular on export procedure in the GST regime. (Reuters)

Exporters can furnish bond or letter of undertaking instead of paying Integrated GST at the time of exporting goods and services with effect from July 1. In case the IGST has been paid, the exporters can seek refund of the tax paid, according to a Customs circular on export procedure in the GST regime. IGST is levied on the supply of any goods and services in the course of inter-state trade or commerce. As per the IGST Act, export and import of goods and services are deemed to be a supply in the course of inter-state trade or commerce. “Supplies of goods and services for exports have been categorised as ‘Zero Rated Supply’ implying that goods could be exported under bond or Letter of Undertaking without payment of integrated tax followed by claim of refund of unutilised input tax credit or on payment of integrated tax with provision for refund of the tax paid,” it said.

For seeking IGST refund, an exporter will not be required to file any application as the shipping bill having IGST invoice details shall be deemed to be an application for refund of taxes paid. It further said that formats of shipping bill have been modified to make them complaint with the GST laws.

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The exporter claiming refund of unutilised input tax credit will file an application electronically through the GSTN. “The application for refund shall be filed on the GST Network portal after the goods or services is delivered. With regard to sealing of container at the time of export, the CBEC has decided to introduce the system of self- sealing. Earlier the sealing had to be done under the supervision of revenue officials.

“It is the endeavour of the Board to create a trust based environment where compliance in accordance with the extant laws is ensured by strengthening risk management system and Intelligence setup of the department. Accordingly, Board has decided to lay down a simplified procedure for stuffing and sealing of export goods in containers,” the circular said. The self-sealing procedure would be effective from September 1.

“A future date has been prescribed since the returns under GST have been permitted to be filed by September 10 and also with the purpose to give enough time to the stakeholders to adapt to the new procedures. “Therefore, as a measure of facilitation, the existing practice of sealing the container with a bottle seal under Central Excise supervision or otherwise would continue,” it said.

  1. G
    gagan
    Sep 14, 2017 at 3:20 pm
    Very soon, I want to renew my export bond for zero rate supply. Since, I am about to complete its 10 Lakh Limit. and I have received all Bill of entry from my buyers as a proof of export. Please tell the procedure for Renewal. 9899706637
    Reply
    1. K
      komal dubey
      Sep 13, 2017 at 2:38 pm
      Hi,how to apply for refund of GST paid for the goods with are exported.if the LUT bond is of another state.
      Reply
      1. V
        Varun Jain
        Sep 5, 2017 at 4:51 pm
        Hi, I am charging IGST on export bills, and my query is do i have to deposit that specific IGST separately and then i will get teh refund or it will it be adjusted in my monthly IGST summery as i also in india also. please help.
        Reply
        1. R
          Ram
          Aug 18, 2017 at 11:20 am
          any one have an idea, if we get advance from our customers for the service and we raise invoice later, do we still need a bond ?
          Reply
          1. D
            Divya
            Sep 5, 2017 at 12:22 pm
            same question, anybody can answer this please ?
            Reply
          2. P
            Percy
            Aug 17, 2017 at 6:20 pm
            Exporter pays I Gst when procuring materials from manufacturer or trader based in India then when exporting to another country use LUT bond to exempt from another GST but GST to buyer abroad is zero and then claim refund RD1 icegate etc makes no sense The goods are in the custody of Indian customs why "pay" and claim with 3 GST upload online and seek refund formula restricting refund amount ... all this does not make sense on exempt goods CGof Ind wants more money The best option is Manufacturer uses its bond to exempt IGST tax and merchant exporter uses its LUT bond for its exemption
            Reply
            1. A
              Atish
              Aug 18, 2017 at 10:04 am
              is the good option, but is this exist ?
              Reply
            2. T
              Tssaini
              Aug 11, 2017 at 5:13 pm
              How can file bond or LUT for export? My consignment is ready but on hold because of this Bond/LUT, someone please help me to ship it to it destination.
              Reply
              1. J
                jaimen
                Aug 17, 2017 at 8:20 am
                If you have more than 1 Cr turn over In last FY then only you can go with LUT Scheme.
                Reply
              2. A
                Adarsh
                Aug 10, 2017 at 8:46 pm
                Before when a manufacturer holding LUT supply to sez without payment of duty , supplier had to send ARE1 form with vehicle when supply to sez after that custom officer need to endorse ARE1 form and send that form to concern central exicise division as a proof of deemed export , but in gst scenario when supply to sez under LUT without payment of IGST what will be the proof of export for supplier to show it as export earlier they used to show endorsed ARE1 form
                Reply
                1. N
                  Nandita Gupta
                  Aug 8, 2017 at 5:42 pm
                  We have sent our Indian employee who employed in our proprietorship firm in India to Africa for making some drawings of railway parts in Africa. He stayed there for one month and we have received payment in Indian bank in Foreign currency. We do not have branch outside India. Apart from Commercial Invoice in USD do we have to make GST Tax Invoice in INR and charging GST and thereafter claiming refund as we are not giving LUT or Bond ? We know export of goods/services are zero rated but do not know how to deal with physically going abroad and giving services there itself in GST regime. Kindly suggest what to do.
                  Reply
                  1. A
                    Ayaz Musharaf
                    Jul 30, 2017 at 11:39 pm
                    I read your article online regarding the new GST system in India and found it to be really helpful, I import textile fabrics from India and need your guidance . 1) A company called Heer Tex is buying fabrics from various local factories (Bharat Tex, Shiv Tex etc ) in India and exporting to me. 2) We got Advance License in the name of Heer Tex Bharat Tex ( supporting manufacturer) so this way we got the benefit of all duty and taxes paid by Bharat Tex on the import of yarn for the manufacture of fabrics sold to Heer Tex. Can you please let me know how this model will work in the new regime. 1) Will Bharat Tex need to pay IGST taxes at the time of import? Or Not? Will Advance License be still valid? If they need to pay IGST then how will they get the refund. 2) Will Bharat Tex put GST on the invoices charged to Heer Tex 3) How will Heer Tex get refund of the GST 4) Will the over all cost of fabric increase, decrease or stay the same?
                    Reply
                    1. A
                      Annu webphantoms
                      Jul 24, 2017 at 12:20 pm
                      Well let's what's gonna be good or bad for youth.
                      Reply
                      1. A
                        Asim N Ray
                        Jul 21, 2017 at 10:11 pm
                        I am a merchant exporter and not a regular exporter means (now got export order after 3 years) I do procure n design goods from different states and do export to Africa to a very small value like 5-6 lakhs. should I need to do GST registration, kindly guide?
                        Reply
                        1. A
                          Anuj
                          Jul 20, 2017 at 1:05 pm
                          What is the effect of IGST on third party export from SEZ unit ? Example : ABC( merchant trader )purchase from XYZ ( SEZ unit ) directy export to 123 ( country ) . its not for in domestic market . Container loaded in side SEZ by XYZ and sealed . Third party shipping bill filled in SEZ custom only and same goes to port for export . Is IGST applicable here ? as per law IGST is applicable after Bill of entry . Bill of entry required for DTA s and above case is not a DTA s , it is direct export done by an Indian trader of goods purchased from SEZ unit or can say it is a third party export done by a SEZ unit . Kindly provide any circular regarding this if available .
                          Reply
                          1. A
                            Amandeep Singh
                            Jul 15, 2017 at 6:25 pm
                            Dear Sir/ Maam, Does a merchant exporter having LUT have to pay IGST to procure material from a Local Manufacturer in India to Export The Goods. That is, will the Local Manufacturer charge IGST in his Invoice to the Merchant Exporter, even if the merchant exporter is having LUT and is going to take the material straight to the PORT for Export. If the Merchant Exporter has to pay IGST to the local manufacturer, then what is the procedure by which the Merchant Exporter van get the Refund of the IGST paid by him to the Local Manufacturer in India.
                            Reply
                            1. P
                              Pramesh Gupta
                              Jul 21, 2017 at 2:13 pm
                              Dear Mr Amandeep, Yes manufacturer will charged IGST/CGST/SGST even if we have LUT BOND. If you are a LUT holder you need not pay the IGST difference and make a application for Refund.
                              Reply
                              1. H
                                Hj
                                Aug 4, 2017 at 11:49 am
                                Note: If you are A LUT holder or have furnished an export Bond, you need to Pay IGST upfront (unlike H-form) and then make an application for refund which the government claims will be done within seven days. In even simpler terms, every exporter has to pay IGST and then reclaim it.You cannot avoid paying tax unlike H-form.
                            2. R
                              Raksh Pal Abrol
                              Jul 11, 2017 at 4:07 pm
                              whether the Central Excise Tariff Act,1985 (5 of 1986) and Central Excise Act,1944 (1 of 1944) have been either amended or repealed after the introduction of GST Act,2017 (12 of 2017) and IGST Act,2017(13 of 2017).It is not yet clear and also the job-work carried out under Notification No. 214/86-C.E. dated 5th March 1986 and Notification No. 83/94-C.E. 84/94-C.E both dated 11th April 1994.The word 'Manufacturer is not defined under Customs Tariff of India,1975. as amended. We understand that Central Tax has thrown out all the taxes imposed by any state in the country on and purchase of Goods and Services.If so please do not affect any Expots
                              Reply
                              1. H
                                harmeet
                                Jul 10, 2017 at 1:44 pm
                                i purchase my machine before july 1. now i am going to export it.and i already paid excise and vat on it, whether i should pay igst now or have to give undertaking or i cann send the machine without doing any thing
                                Reply
                                1. S
                                  saket shah
                                  Jul 7, 2017 at 6:07 pm
                                  I am a merchant Exporter. DO I first need to pay IGST and then get back the credit or is there any way through which we dont need to pay taxes as it is for export only.
                                  Reply
                                  1. Z
                                    Zain Jawadwala
                                    Jul 6, 2017 at 4:12 pm
                                    If an exporter is self sealing the container at his factory premises without examination and report by a central excise officer, who will examine the goods ? Can you please assist ?
                                    Reply
                                    1. S
                                      sheela
                                      Jul 6, 2017 at 2:43 pm
                                      We are an exporter company supplying through international funded tenders in Africa.We import lot of equipment and keep in custom bonded warehouse and then de-bonding is done and it is exported. We need to inform that those imported products will not be used in India. It will be shipped to Africa based on the client LC terms. Now we came to know that we need to pay IGST which will be huge amounts for each imported goods. Kindly advice in this matter.
                                      Reply
                                      1. B
                                        BALA S
                                        Jul 7, 2017 at 12:52 pm
                                        IF THE GOODS ARE CLEARED UNDER BOND (AGAINST RE- EXPORT BOND) , THE I G S T MAY NOT REQUIRED TO BE PAID AND L.U.T MAY BE EXECUTED FURTHER IF NEED SO AS PER GST / IGST FOR EXPORTS. IS THIS IMPORT TAKEN PLACE AT SEA PORT / DRY PORT. BALA S
                                        Reply
                                      2. S
                                        Shaibul Hoque Mozumder
                                        Jul 5, 2017 at 7:17 pm
                                        What is the procedure of good to SEZ ,‘Zero Rated Supply’ ?
                                        Reply
                                        1. S
                                          Sudhagar
                                          Jul 5, 2017 at 1:16 pm
                                          1) Exports of goods on payment of IGST and file refund.... it means 100Pct of IGST paid has been granted to refund ?? 2) If exports of goods under Bond / LUT to be furnished (As per new notification of 1st July, 2017) whether existing running BOND/LUT will be used or New BOND / LUT must get.. to avail export of goods without payment of IGST... ? 3) If apply for new BOND/LUT as per new notification it is mentioned to provide Bank Guarantee .... (Obtain bank guarantee from bank, there charges min. 5 pct to 10 pct on BG amount it means to get 5 Lacs Bank Guarantee on that the bank charges will be Rs. 50000).... So FDR (Fixed Deposit infavour of Authority) or RCMC (membership certificate) can be used in place of BG.... Kindly clarify...
                                          Reply
                                          1. S
                                            Sudhagar
                                            Jul 5, 2017 at 1:10 pm
                                            1) Exports of goods on payment of IGST and file refund.... it means 100 of IGST paid has been granted to refund ?? 2) If exports of goods under Bond / LUT to be furnished (As per new notification of 1st July 2017) whether existing running BOND/LUT will be used or New BOND / LUT must get to avail export of goods without payment of IGST... ? 3) If apply for new BOND/LUT as per new notification it is mentioned to provide Bank Guarantee .... (To obtain bank guarantee from bank there charges min. 5 to 10 on BG amount it means to get 5 Lacs BG on that bank charges will be Rs. 50000).... So whether FDR (Fixed Deposit infavour of Authority) or RCMC (membership certificate) can be used in place of BG.... Kindly clarify...
                                            Reply
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