In case of export of goods can a exporter can also claim duty drawback under customs law…??? Under GST regime, there are only two ways possible to export goods or services from India. OIDAR (Online Information and Database Access or Retrieval) Services. I am promoting the US-based company’s product in India on the internet. What is Zero rated Supply? Please clarify whether in case of sample sent to overseas for approval, IGST is payable or it will be treated as Export & exempted. Maintained by V2Technosys.com, Taxguru Consultancy & Online Publication LLP, 509, Swapna Siddhi, Akurli Road, Near Railway Station, Kandivali (East), Opening of Individual Pension Account under eNPS, Just Start – Don’t wait for right opportunity, Denial of IGST refund for export goods through Foreign Post Offices, Financial assistance received in lieu of services to be provided by Indian subsidiary company to holding company in Germany is a supply of service, Transitional Credit- HC explains implication of directions to ‘consider’ a case, Webinar on Career Growth in Litigation Mgmt & IDT (GST) – Best Practices, All about Aadhaar Authentication for Existing GST Taxpayers, Section 44AD not eligible on Interest/Remuneration Income of Partner from partnership firm, AIFTP request for further extension of Income-tax due dates. Can you tell me about GST applicability in this case? Zero-rated supply does not mean that the goods and services have a tax rate of ‘0 ’. 37/11/2018-GST, dated 15-3-2018, All About Aadhar Authentication In GST Registration, Summary of GST Notifications & Circular issued on 3rd April 2020, GST Laws & Procedure on death of Proprietor, Sub-contract in Road Transport Sector & Reversal of ITC, Denial of IGST refund for export goods through Foreign Post Offices, Financial assistance received in lieu of services to be provided by Indian subsidiary company to holding company in Germany is a supply of service, Transitional Credit- HC explains implication of directions to ‘consider’ a case, Webinar on Career Growth in Litigation Mgmt & IDT (GST) – Best Practices, All about Aadhaar Authentication for Existing GST Taxpayers, Section 44AD not eligible on Interest/Remuneration Income of Partner from partnership firm, AIFTP request for further extension of Income-tax due dates. Dear sir, 42/2017-Integrated Tax (Rate) 27th October 2017. (i) the supplier of service is located in India; (ii) the recipient of service is located outside India; (iii) the place of supply of service is outside India; (iv) the payment for such service has been received by the supplier of service in convertible foreign exchange; or in Indian rupees wherever permitted by RBI, [inserted vide IGST (Amendment) Act, 2018, w.e.f. What is the nature of transaction and liability under GST if any ? iii) Place of supply In India. the UK based company is going to pay in foreign currency. If bond amount is not sufficient, fresh bond should be executed. 14/2018-Cus dated 4-6-2018.). Excellent article , Ramandeep ji. If not than which type of service it will be consider.? Is he liable to register under gst ? How much tax do I have to pay? Because its written in OIDAR form “services from a place outside India to a person in India” comes under OIDAR. These are specific conditions that are laid down for supply to be considered an export service under GST. If filed no further action required . Why I have used word “effectively”, because in order to qualify any export of service as “ZERO RATED” supply, you need to fulfil certain conditions, you need to follow certain procedures. Basically, its data entry of accounting, sales, purchase, expenses etc..& sends them backup folder of tally. The LUT shall be deemed to have been accepted as soon as an acknowledgement reference number (ARN) is generated online. Ltd. is fulfilling all the conditions to qualify the service as Export of Service. Now, bond and guarantee is required in very few cases. Hence, export of goods to Nepal and Bhutan will be treated as zero orated and consequently will also qualify for all the benefits available to zero rated supplies under the GST regime irrespective of the fact that export realization is received in Indian Currency. – Sec.16 (1) IGST ACT, (1) “zero rated supply” means any of the following supplies of goods or services or both, namely:––, (a) Export of goods or services or both; or, (b) Supply of goods or services or both to a Special Economic Zone developer or a Special Economic Zone. Conditions to be fulfilled to qualify as Export of Services under GST. However if we go to IGST act where zero rated supplies are specified tax is not to be charged. (1) The shipping bill filed by an exporter of goods shall be deemed to be an application for refund of integrated tax paid on the goods exported out of India and such application shall be deemed to have been filed only when:-, (a) the person in charge of the conveyance carrying the export goods duly files an export manifest or an export report covering the number and the date of shipping bills or bills of export; and. Nice article for layman in simple language to understand. Many exporters re not getting the refund even after doing all the paper work. It involves huge liability and loss on interest. Will I be eligible for ITC.? 1-2-2019 and, (v) the supplier of service and the recipient of service are not merely establishments of a distinct person. Answer: Under the GST Law, export of goods or services has been treated as: inter-State supply and covered under the IGST Act. We have obtained LUT in the month of July 2018. Will receive payments in $ US The total job will be outside India Do I have need to pay GST in India ? LUT can be filed by an exporter who is : • either a status holder, or • has received convertible foreign exchange @ 10% of turnover or minimum of Rs. Sir, We have rendered a service to a overseas agency for marketing their products and have received commission in USD terms. Your email address will not be published. What if in this case the receiver is ready to pay the transit expenses? Circulars Issue: Clarifications: Circular No. In case of export of goods, realization of consideration is not a pre-condition. Consideration of Provision for bad & doubtful debts as operating expenses in computation of PLI, Benefit of Filing Income Tax Return for an individual and HUF, Due Date Compliance Calendar January 2021, Corporate Compliance Calendar for January 2021, Join Online Certification Courses on GST covering recent changes, Applicability of Cash Flow Statement, CARO (2016 & 2020) & Internal Financial Control, Income Tax Calculator for Financial Year 2020-21 for Individuals, ICAI request for further extension of TAR/ITR due dates, CA Association Criticised Action & Policies of FMO after insufficient due date extension, Representation for further extension of CFSS 2020, Request for extension of Company Fresh Start Scheme 2020, FORM GST RFD-11 (as per Rule 96A CGST Rule). In order to submit a comment to this post, please write this code along with your comment: 4b81e656f9aca1f06552dae95cee267e. I am an exporter of service and I am receiving payment in foreign currency. GST registration require for the same under export of services. 2. Share. Will I get Exemption ? As the qty, value in Shipping Bill, Invoice and EGM will mismatch. CA Robin Garg on 28 May 2020. Refund Mechanism for Export of Services under GST Background GST is a destination based consumption tax where in the levy of tax moves along with goods and /or services. There are many who have paid IGST on imports for export production. How Exporter can claim refund for Zero rated supply? We are manufacturer and registered under GST. The Application is mainly used in Dubai. 4-10-2017. Latest amendment in DBK was at end Jan 2018, please see this in the DBK/RSOL incentive rates in the post Budget 2018 books in the market. ♣ Way of providing Service – These enhancements & or changes will be done by C Pvt. i couldn’t clear yet whether GSt application in export of service ? Further, suitable notifications shall be issued to amend the relevant regulations and introduce modified Forms. Company pays me salary once in 2-3 months to my saving account in India through overseas remittance. Transaction compiling all the above three conditions will constitute import of service. Where to invest money in India (to make it work for you)? . Shall i pay the import duty in india or my export will clear the material in his country? Does this come under export of services? I make no sales in India. Complete work will be done online through a website. So can you clear whether to pay IGST or not? I get payment via PayPal. This period can be extended by Commissioner. Do you handle such cases to file taxes and other process to be compliant w.r.t FEMA, GST and Income Tax etc laws in india. Ltd is going to be provided will, The C Pvt. We have rendered Management consultancy Services outside India during FY 17-18 without paying IGST. (b) 15 days after expiry of one year or such further period as may be allowed by Commissioner, from date of issue of invoice for export, if payment is not received by the exporter or in convertible foreign exchange or in Indian Rupees, where permitted by RBI – (rule 96A(1) of CGST Rules, as amended w.e.f. Export is treated as Inter-state supply under GST and IGST is charge on export. Sir, small quantities are supplied to various recipient located at different places and Invoice has to be raised to their principal. b) Location of Supplier is in India – services supplied to an individual, represented either as the recipient of services or a person acting on behalf of the recipient, which require the physical presence of the recipient or the person acting on his behalf, with the supplier for the supply of services. However, the definition of ‘export of services’ in the GST Law requires that the payment for such services should have been received by the supplier of … A supply of service will be treated as zero rated export if: the supplier of service is located in India; Supply of goods by a registered person against Advance Authorization, Supply of capital goods by a registered person against Export Promotion Capital Goods Authorization, Supply of goods by a registered person to Export Oriented Unit, Supply of gold by a bank or Public Sector Undertaking specified in the. tell me one thing you are saying to pay IGST on export as it is considered as Inter state supply under IGST act and other side you have mentioned one line i.e GST will not be levied in any Kind of Exports of Goods or Services. ONE OF MY ASSESSEE IS PROVIDING SERVICE OF MANPOWER SUPPLY OUTSIDE INDIA COMPANY. What Will Be Considered As Export Service Under GST? This blog will help you underst and GST registration and compliances related issues if you are an exporter of goods or services… (c) 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. if place of supply is out of India (Notification No. The exporter may utilize such credits for discharge of other output taxes or alternatively, the exporter may claim a refund of such taxes as per section 54 of CGST or Rules made there under. 9/2017-IT (Rate) both dated 28-6-2017 as inserted w.e.f. Destination of export of goods/and services would be outside India and hence there would be no GST liability on such transactions. LUT can be on letter head of exporter with signature and seal of authorised person. Treatment of Exports under GST As per the provisions contained under IGST law, export of goods or services or both are to be regarded as “zero-rated supplies” and a person being a registered taxable person exporting such goods or services or both shall be allowed to claim the refund of the GST paid under one of the following two options: So let see what characteristics (as per the rules of Authorities of West Bengal) tag the service as an export and make it GST free: The service provider must be located in India. (b) 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. Very easy to understand with illustrative flow chart. A guidance note relating was released by the Indian government which has helped in clearing doubts regarding the claim of input tax credit on zero-rated exports. Email. the goods or services exported shall be relieved of GST levied upon them either at the input stage or at the final product stage. This would result in unjust enrichment. A letter of undertaking … He may export the Goods/services under a Letter of Undertaking, without payment of IGST and claim refund of unutilized input tax credit; (Rule 96A of CGST Rules), (1) Any registered person availing the option to supply goods or services for export without payment of integrated tax shall furnish, prior to export, a bond or a Letter of Undertaking in FORM GST RFD-11 Bond and LUT Format to the jurisdictional Commissioner, binding himself to pay the tax due along with the interest specified under sub-section (1) of section 50 within a period of—. January 25, 2019 | 4850 views. (How are Exports treated under GST Law? Your email address will not be published. Declaration about non-prosecution is already filed with LUT. Exports have been the area of focus in all policy initiatives of the Government for more than 30 years. e.g. This principle applies in case of export of service also – (CBI&C circular No. Export of goods to Nepal or Bhutan fulfils the condition of GST Law regarding taking goods out of India. In other words, as it has been well discussed in section 17(2) of the CGST Act that input tax credit will not be available in respect of supplies that have a ‘0%’ rate of tax. The payment is received by non registered person directly into his bank account from abroad. (b) Supply of goods or services or both to a Special Economic Zone developer or a Special Economic Zone unit. 3. 1. 40/2017- Central Tax (Rate), date 23-10-2017 issued and in respective state as well). Most businesses that deal under GST already know the invoice format requirements, but some questions arise when they do business with foreign clients with the place of supply outside of India. Exports of goods and services to Nepal and Bhutan and supplies to SEZ is ‘export’ even if payment is received in Indian rupees – MF(DR) circular No. Yearly Income is less than 20 lakhs. ), Refund of input tax credit will be permissible even if export is made after three months. .10% ON EXPORT. I cancelled my gst number in March-2018 but till now no approved or cancellation report issued and so I cant apply further cancellation now what can I do please suggest me. 37/11/2018-GST, dated 15-3-2018.). Some supplies have been notified as deemed export vide above notification as below: (Author is chartered accountant from Raipur,  Chhattisgarh practicing in indirect tax and is national empanelled faculty of indirect tax committee of ICAI, New Delhi. Thanks once more. In this spirit of avoiding export of taxes, the GST laws of India also categorise exports as “zero rated supplies”, giving two options to an exporter – (i) export without payment of taxes and claim refund of unutilised input tax credits, or (ii) export with payment of tax and claim refund of the tax paid. On the other hand, GST demands that the input-output chain not be broken and exemptions have a tendency to break this chain. How do I file for refund? An update on recent circulars providing clarifications on export of services under GST and refund related issues. All exporters registered under GST can export goods or services without payment of IGST, on execution of LUT, except those who have been prosecuted for offence under any law where tax evade exceeds Rs 250 lakhs. The LUT is valid for whole financial year. I am providing Technical consulting to a company with office and located in UAE. A duty drawback was provided under the previous laws for the tax paid on inputs for the export of exempted goods. Pls Guide me. All exporters registered under GST can export goods or services without payment of IGST, on execution of LUT, except those who have been prosecuted for offence under any law where tax evade exceeds Rs 250 lakhs. GST will not be levied in any Kind of Exports of Goods or Services.). Join our newsletter to stay updated on Taxation and Corporate Law. Thus, all direct exporters are required to execute only LUT w.e.f. The manufacturer exporter shall clear goods on payment of 0.1% IGST (or 0.05% of CGST plus 0.5% of SGST/UTGST). Author may be contacted at caramandeep.bhatia@gmail.com or on  + 91 9827152729), (Republished with Amendments. No, you don’t have to charge GST. the goods or services exported shall be relieved of GST levied upon them either at the input stage or at the final product stage. Wherever Commercial Invoice is different from Tax Invoice, details of both have to be provided in the Shipping Bill. However, if in a State, the Commissioner of State Tax so directs, by general instruction, to exporter, the Bond/LUT in all cases be accepted by Central tax officer till such time the said administrative mechanism is implemented. For the benefit of the trade, modified Forms have been hosted on the departmental website, www.cbec.gov.in. These exports will be zero rated. Meaning of Export Export of goods under GST:According to Section 2(5) of IGST,export of goods with its grammatical variations and cognate expressions, meanstaking goods out of India to a place outside India.Export essentially means trading or supplying of goods and services outside the domestic territory of a country. The supply is essentially automated involving minimal human intervention and impossible without information technology. Therefore it will not be an export and if location of supplier i.e. Sir Iam giving book-keeping services in Tally Software to the company located out of India. 37/11/2018-GST dated 15-3-2018). Also what would be the place of supply if I render Digital advertising services ( from India ) to a client in USA ( targeting USA market )? If it is later found that the exporter was not eligible to submit LUT, the LUT shall be deemed to have been rejected ab initio – CBI&C circular No. i.e. Exports of goods: Section 2 (5) of IGST Act, 2017 provides that 'export of goods' means taking goods out of India to a place outside India. The recipient of the service is located outside India. Dear Sir, As per IGST Act Section 2 (6) “Export of services” means the supply of any service when, –. 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