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Goods & Services Tax (GST)


Frequently Asked Question (FAQ)
Goods & Services Tax (GST)

Question: GST Exports
Question: GST General
Question: GST Rates
Question: Composition Levy
Question: GST MSME
Question: GST Textile
Question: Gems & Jewellery
Question: Handicrafts
Question: Mining
Question: Drug & Pharmaceuticals
Question: Food Processing
Question: E-Commerce
Question: IT - ITES
Question: How are exports treated under GST?
Both export and import are governed under the IGST Act. Exports are treated as zero rated supply under IGST.
Question: How will imports be taxed under GST?

All imports will be deemed as inter-State supplies for the purposes of levy of GST. IGST is leviable on imports in addition to other duties of customs. Full set-off will be available as ITC of the IGST paid on import on goods and services.

Question: How many types of GST will be levied on different kinds of supply of goods or services?

GST is a dual levy to be simultaneously levied by both Centre and State.

· On every supply within a State/ Union Territory without legislature (intra-State supply), GST levied will have two components - Central Tax and State Tax/ Union Territory Tax popularly called CGST and SGST/UTGST.

· On every supply across States (inter-State), Integrated Tax popularly called IGST will be levied.

The rate of CGST and SGST/UTGST would be equal. IGST would be levied at a rate equal to the sum total of CGST and SGST/UTGST.

Question: Is GST going to increase compliance burden on the trade?
On the contrary GST will result in streamlining of processes and reduction of compliance burden. GST is a simple tax which uniformly applies across the country. GST has been designed to have minimal human interface and would be implemented through strong IT platform run by GSTN. Also, in the earlier regime there were multiple compliances required for taxes such as Central Excise, Service tax, VAT etc. with Centre and State. GST makes it single and uniform compliance for indirect taxes across the country.
Question: In which State will a person be registered?
A person liable to be registered has to apply for registration in each State from where he makes or intends to make outward supplies under GST. Within each State, generally only one registration is required to be obtained.
Question: What do you mean by zero rated supply?
It means that output supply would be exempted while input ITC would be refunded on the exported goods.
Question: Is a job worker required to take registration?
As job work is a service, it would be considered a supply and the job worker would be required to obtain registration if his aggregate turnover exceeds the prescribed threshold of Rs.20 lakhs or, as the case may be, Rs.10 Lakhs.
Question: What are the options available to exporters under GST?

Exporter has to furnish LUT on Letterhead in the format specified in RFD 11.

Furnish in duplicate, on the Letterhead, signed by authorized person, for a financial year in an annexure to form RFD 11 to the jurisdictional Deputy Commissioner/ Assistant Commissioner.

The exporter is at liberty to furnish to Central/ State tax authority.

Question: Who is eligible for LUT/Bond?
All exporters are eligible for LUT, as per Circular no. 8/8/2017- GST dated 4/10/2017, subject to conditions stipulated therein.
Question: How do you file Shipping Bill after GST? Are there any charges?
Exporter has to mention the GSTN Number on the Shipping Bill and the State Code at the Master level as well as appropriately mention their IGST payment status i.e., exports with/ without payment of IGST.
Question: What kind of invoice is required for exports?

There is no specific format of invoice prescribed for exports. However, it is important that certain information is given in the invoice so as to get refund of tax paid on goods or unutilized input tax credit. Please ensure that the following information is available in the invoice :- 

a. name, address and GSTIN of the exporter;

b. a consecutive serial number, in one or multiple series, containing alphabets or numerals or special characters, hyphen or dash and slash symbolized as “-” and “/” respectively, and any combination thereof, unique for a financial year;

c. date of its issue;

d.  HSN code of goods or Accounting Code of services; description of goods or services;

e. quantity in case of goods and unit or Unique Quantity Code thereof;

f.  total value of supply of goods or services or both;

g. rate of tax (integrated tax);

h.  amount of tax charged in respect of taxable goods or services (integrated tax);

i.  place of supply along with the name of State;

j. signature or digital signature of the supplier or his authorized representative;

k. The invoice shall carry an endorsement “SUPPLY MEANT FOR EXPORT ON PAYMENT OF IGST” or “SUPPLY MEANT FOR EXPORT UNDER BOND OR LETTER OF UNDERTAKING WITHOUT PAYMENT OF IGST”, as the case may be, and shall contain the following details:

i.    name and address of the recipient;
ii.   address of delivery;
iii.  name of the country of destination; and

Question: Will export of goods to Nepal and Bhutan treated as zero rated and thereby qualify for all the benefits available to zero rated supplies under the GST regime?

Export of goods to Nepal or Bhutan fulfils the condition of GST Law regarding taking goods out of India. Hence, export of goods to Nepal and Bhutan will be treated as zero rated and consequently will also qualify for all the benefits available to zero rated supplies under the GST regime. 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 services in convertible foreign exchange.

Question: Is Drawback at higher AIR admissible if an exporter has not availed ITC of GST or refund of IGST paid on export of goods?
No, after 30th September, 2017 Drawback will be availed only at lower rate determined on the basis of Customs duties paid on the goods imported, unless extended by the Govt. 
Question: Can an exporter apply for both refund under GST and Drawback of composite rates?
No, these composite rates are subject to certain conditions during the transition period that ensure that input credit / refund under GST and Drawback of composite rates notified are not taken together for the export product.
Question: What if an exporter is unable to produce the requisite certificate for claiming composite AIR at the time of export?
The exporter should have the Shipping bill amended to claim lower AIR (Customs portion) at time of export. The exporter can claim balance amount of drawback as supplementary claim when he produces certificate.
Question: What if the export goods have been cleared form factory or warehouse etc. prior to 01.07.2017 but export order has not been given till 30.06.2017?
In the above case certificate from GST officer is not required. Instead, only a declaration from exporter or certificate from the then Central Excise Officer as applicable, is required.
Question: What are the GST refund options available to the exporters?

An exporter would be eligible to claim refund under one of the following two options, namely-

 I. He may export under LUT, without payment of IGST and claim refund of unutilized input tax credit in;

II. He may export on payment of IGST and claim refund of IGST paid on goods and services exported.

 

(As per Customs instruction no. 15/2017 dated 09.10.2017, IGST may be refunded on the basis of GSTR 3B and GSTR-1 filed).

Question: What is the time line for obtaining refund on the GST paid?

Refund on account of export

 I. Refund of 90% will be granted provisionally within 7 days of acknowledgement of refund application.

II. Remaining 10% will be paid within a maximum period of 60 days from the date of receipt of application complete in all respects.

Question: Presume ITC can be used to pay Output Tax Liability- can the balance be claimed in the form of Refund?

ITC can be used for payment of Output Tax Liability. In case of exports, the refund amount will be to the extent of output tax liability. Such claim can be filed as per the tax return and thus you can claim it on monthly basis after filing GSTR-3.

Question: If the material is procured from GST registered traders who does the finishing for the company after purchasing the material from another GST registered unit, is the company required to pay GST and then claim for refund?
If it is not a case of job work, the company may pay to the supplier inclusive of GST and take a refund of the same when you export the material.
Question: If we pay IGST on exports, what application has to be filed for claim of the same and let us also know the procedure for the same?

For refund of integrated tax paid on goods exported out of India, no application is required to be filed. The shipping bill filed by an exporter shall be deemed to be an application for refund of integrated tax paid and such application shall be deemed to have been filed only when:-

  1. the export manifest or an export report covering the number and the date of shipping bills or bills of export; and
  2. the applicant has furnished a valid return in FORM GSTR-3;
  3. The details of the relevant export invoices contained in FORM GSTR-1 shall be transmitted electronically by the common portal to the system designated by the Customs and the said system shall electronically transmit to the common portal, a confirmation that the goods covered by the said invoices have been exported out of India.
  4. Upon the receipt of the information regarding the furnishing of a valid return in FORM GSTR-3 from the common portal, the system designated by the Customs shall process the claim for refund and an amount equal to the integrated tax paid in respect of each shipping bill or bill of export shall be electronically credited to the bank account of the applicant mentioned in his registration particulars and as intimated to the Customs authorities.
Question: Can goods be supplied to Merchant Exporter on bond? Will merchant exporter get benefits/refund of duty paid by manufacture?
Goods cannot be supplied to merchant exporter against bond. The CGST/SGST or IGST would be charged on such supply depending whether such supplies are intra state or interstate. The Merchant exporter can claim the GST paid as input tax credit which will be refunded to him at the time of exports.
Question: What is the procedure to be followed for obtaining Input Tax Credit (ITC)?

Following four conditions are necessary for obtaining ITC:

  1. The registered taxable person should be in possession of taxpaying document issued by a supplier;
  2. The taxable person must have received the goods and / or services;
  3. The tax charged on such supply has been actually paid to the government either in cash or through utilization of input tax credit; and
  4. The taxable person should have furnished the return under section 27.
Question: As a manufacturer, can unutilized Input tax credit be allowed as refund?

Yes, but only in following cases input tax credit will be allowed to be refunded

  1. Exports of goods on which export duty is not payable;
  2. Exports of services;
  3. Where credit has accumulated on account of rate of tax on inputs being higher than the rate of taxes on Outputs.
Question: What type of duties can be paid using MEIS or SEIS scrips now? Can we use these scrips to pay GST?

For items covered under the GST, scrips can only be used for the payment 

  • Basic Custom Duty,
  • Safeguard Duty,
  • Transitional Product Specific Safeguard Duty, and
  • Antidumping Duty.

For items not covered under the GST (specified in Fourth Schedule to Central Excise Act 1944 covering specified petroleum products, tobacco etc.), in addition to the above can also be used for payment of duties like central excise, CVD/ SAD.

The scrips cannot be used for payment of any type of GST.

Question: What will be the position of exports under Advance Authorizations?

Under the GST regime, no exemption from payment of Integrated GST and Compensation Cess would be available for imports under Advance Authorization.  Importers would need to pay IGST and take input tax credit as applicable under GST.

Question: Whether Invalidation Letter & ARO Facility will continue under the Advance Authorization Scheme?
The Facility of Invalidation Letter will continue.  However, Advance Release Order facility shall not be available for procurement of inputs under Advance Authorization scheme.
Question: Under GST regime, can we get duty free benefit (all duties exempted) if we import capital goods using EPCG authorization?

Only Basic customs duty will be exempted on imports made under EPCG Authorization. The EPCG holder will have to pay IGST on import of capital goods and take Input Tax Credit.

 

(As per announcement in GST Council meeting held on 06.10.2017, EPCG Scheme has been extended for duty free procurement of Capital Goods i.e., payment of IGST)

Question: Is GST payable on consideration received for sale of scrips?

Yes. Scrips are goods and sale of scrips has to be treated as supply of goods. GST at applicable rate will therefore be payable.

(As per announcement made on 06.10.2017 GST rate for sale of Scrips will be now 0%).

Question: What is deemed export under GST Law? Whether any supply has been categorized as deemed export by the Government?

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. Under section 147, the Government may, on the recommendations of the Council, notify certain supplies of goods manufactured in India 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. However, till date, the government has not notified any supply as deemed export.

Question: The supplies to a SEZ unit or SEZ developer are treated as zero rated supplies in the GST Law. But no mention in the GST Law about not charging of tax in respect of supplies from DTA unit to a SEZ unit or SEZ developer?

Yes, supplies made to an SEZ unit or a SEZ developer are zero rated. The supplies made to an SEZ unit or a SEZ developer can be made in the same manner as supplies made for export:

• either on payment of IGST under claim of refund;

• or under bond or LUT without payment of any IGST.

Question: When a SEZ unit or SEZ developer procures any goods or services from an unregistered supplier, whether the SEZ unit or SEZ developer needs to pay IGST under reverse charge or these will be zero rated supplies?

Supplies to SEZ unit or SEZ developer have been accorded the status of inter-State supplies under the IGST Act. Under the GST Law, any supplier making inter-State supplies has to compulsorily get registered under GST. Thus anyone making a supply to a SEZ unit or SEZ developer has to necessarily obtain GST registration.

Question: Is there any scheme for payment of taxes under GST for small traders and manufacturers?

Yes. Composition levy is an alternative method of levy of tax designed for small taxpayers whose turnover is up to Rs.1 Crore (Rs.75 lakhs for special category States, excluding J&K and Uttrakhand). It is a kind of turnover tax. The objective of the scheme is to provide a simplified tax payment regime for the small tax payers. The scheme is optional and is mainly for small traders, manufacturers and restaurants.

Question: Can a person paying tax under composition scheme make exports or supply goods to SEZ?

No, because exports and supplies to SEZ from Domestic Tariff Area are treated as inter-State supply. A person paying tax under composition scheme cannot make inter-State outward supply of goods. 

Question: Can a manufacturer under composition scheme do job-work for other manufacturers?

Job-work is a supply of service and not eligible for composition scheme. Any manufacturer or processor who wishes to carry out job-work for others would not be eligible for composition scheme.

Question: What is the most important precaution to be taken to avail the facility of threshold exemption?

An MSME availing threshold exemption should not make any inter-State supply whatsoever, though the MSME may receive supply from other States.

Question: If I register voluntarily though my turnover is less than Rs. 20 lakhs, am I required to pay tax on supplies made post registration?

Yes. If you obtain voluntary registration despite the turnover being below Rs. 20 lakhs, you would be treated as a normal taxable person and would need to pay tax on supplies even if they are below the threshold for registration. You will also be entitled to take input tax credit.

Question: Is it necessary to issue invoices even if the value of transaction is very low?

A registered person may not issue a tax invoice if the value of the goods/services supplied is less than Rs.200/-, subject to the condition that the recipient is not a registered person and the recipient does not ask for such invoice (if the recipient asks for the invoice then the same must be issued, irrespective of the value). In such cases, the registered person shall issue a consolidated invoice at the end of the day in respect of all such supplies.

Question: If goods are transported in semi-knocked down condition, when shall the complete invoice be issued?
When goods are transported in semi-knocked down condition, the complete invoice shall be issued before dispatch of the first consignment. Delivery challan shall be issued for subsequent consignments. Original copy of invoice shall be sent along with the last consignment.
Question: Whether the EOU scheme will continue to be in operation in the GST regime and whether EOU is required to take registration under the GST Law?

EOU is like any other supplier under GST and all the provisions of the GST Law will apply. However, the benefit of Basic Customs Duty exemption on imports will continue. 

Question: What tax benefits will be available to EOU scheme in GST regime?

The duty free imports under GST regime will be restricted to Basic Customs Duty. Exemption from the additional duties of Customs, if any, under section 3(1), 3(3) and 3(5) of the Customs Tariff Act, 1975 and exemption from Central Excise duty will be available for goods specified under the fourth Schedule to the Central Excise Act. IGST or CGST plus SGST will be payable by the suppliers who make supplies to the EOU. The EOU will be eligible, like any other registered person, to take Input Tax Credit of the said GST paid by its suppliers.

(As per announcement on 06.10.2017, duty free sourcing of inputs is extended to EOUs).

Question: Whether supplies to or from EOU will be exempted from GST?

No. Under the GST Law, IGST or CGST plus SGST will be payable by the suppliers who make supplies to the EOU. The EOU will be eligible to take Input Tax Credit of the said GST paid by its suppliers.

The supplies from EOU will not be exempted from GST, except in the case of zero rated supplies defined under section 16 of the IGST Act, i.e. supplies made by EOU in the form of physical export or supplies to a SEZ Unit or SEZ Developer for authorized operations.

Question: I supply goods to SEZ units and developers. For such supplies, presently drawback is available to the recipient or to me (if recipient gives a disclaimer). What is status of such drawback under GST regime?

There is no change except for the fact that if drawback is claimed by DTA supplier, the claim needs to be filed with the jurisdictional Customs Authorities.

Question: Whether an EOU can clear goods in DTA?

Yes, an EOU can clear goods in DTA in accordance with the provisions laid in the Foreign Trade Policy.

Question: Who is an e-commerce operator?

Electronic Commerce Operator has been defined in Sec. 2(45) of the CGST Act, 2017 to mean any person who owns, operates or manages digital or electronic facility or platform for electronic commerce. 

Question: Is it mandatory for e-commerce operator to obtain registration?

Yes. As per Section 24(x) of the CGST Act, 2017 the benefit of threshold exemption is not available to e-commerce operators and they are liable to be registered irrespective of the value of supply made by them.

Question: Will an e-commerce operator be liable to pay tax in respect of supply of goods or services made through it, instead of actual supplier?
Yes, but only in case of services notified under Sec. 9(5) of the CGST Act, 2017. In such cases tax shall be paid by the electronic commerce operator if such services are supplied through it and all the provisions of the Act shall apply to such electronic commerce operator as if he is the supplier liable to pay tax in relation to the supply of such services. A similar provision for inter-State supply is provided for in Sec. 5(5) of the IGST Act, 2017. (Refer to Notification No. 17/2017- Central Tax (Rate) and 14/2017- Integrated Tax (Rate) dated 28.06.2017).
Question: Will threshold exemption be available to electronic commerce operators liable to pay tax on notified services?

No. Threshold exemption is not available to e-commerce operators who are required to pay tax on notified services supplied through them.

Question: It is very common that customers of e-commerce companies return goods. How these returns are going to be adjusted?

An e-commerce company is required to collect tax only on the net value of taxable supplies. In other words, the value of supplies which are returned are adjusted in the aggregate value of taxable supplies. (Refer to Explanation to Sec. 52(1) of the CGST Act, 2017).

Question: What is Tax Collection at Source (TCS)?

The e-commerce operator is required to collect an amount at the rate of one percent (0.5% CGST + 0.5% SGST) of the net value of taxable supplies made through it, where the consideration with respect to such supplies is to be collected by such operator. The amount so collected is called as Tax Collection at Source (TCS). (Refer to Section 52(1) of the CGST Act, 2017).

Question: I am a supplier selling my own products through a web site hosted by me. Do I fall under the definition of an “electronic commerce operator”? Am I required to collect TCS on such supplies?

Yes, you will come under the definition of an “electronic commerce operator”. However, according to Section 52 of the Act ibid, TCS is required to be collected on the net value of taxable supplies made through it by other suppliers where the consideration is to be collected by the ECO.

In cases where someone is selling their own products through a website, there is no requirement to collect tax at source as per the provisions of this Section. These transactions will be liable to GST at the prevailing rates. 

Question: We purchase goods from different vendors and are selling them on our website under our own billing. Is TCS required to be collected on such supplies?

No. According to Section 52 of the CGST Act, 2017, TCS is required to be collected on the net value of taxable supplies made through it by other suppliers where the consideration is to be collected by the ECO. In this case, there are two transactions - where you purchase the goods from the vendors, and where you sell it through your website.

For the first transaction, GST is leviable, and will need to be paid to your vendor, on which credit is available for you.

The second transaction is a supply on your own account, and not by other suppliers and there is no requirement to collect tax at source. The transaction will attract GST at the prevailing rates.

Question: Do travel agents providing services through digital or electronic platform qualify as ECOs? Will they be required to collect tax at source as per the provisions of Section 52 of the GST Act?

Online travel agents providing services through digital or electronic platform will fall under the category of ECOs liable to deduct TCS under Section 52 of the CGST Act, 2017.

Question: 54 Whether raw jute suppliers are liable for registration?

Raw jute has been kept at NIL rate of GST i.e. there would be no tax on raw jute. Therefore, as per Section 23 (1) (a) of the CGST Act, 2017 the suppliers dealing only in raw jute are not required to register.

Jute mills and raw Silk are not required to pay tax under Reverse Charge Mechanism (RCM) as mentioned under Section 9(4) of the CGST Act, 2017 because both the goods have been kept at NIL rate of duty. Similarly, the suppliers dealing only in raw silk aren’t required to register.

Question: Does the buyer of raw cotton (who is a registered person) from the farmer need to pay GST on Reverse Charge basis?

Yes. As the cotton under heading 5201 and 5203 has been placed under 5% rate and the cotton farmer is not liable to registration, the buyers of raw cotton (who are registered persons) from the farmers are required to pay tax on reverse charge basis as per Section 9 (4) of the CGST Act, 2017. 

Question: Man-made textile yarns have been kept at 18%& while fabrics have been kept at 5%&. If I buy yarn worth Rs. 100 by paying tax at 18%& i.e. Rs. 18/- and I sell grey fabrics at Rs. 150/- considering 50%& value addition by paying tax at 5%& i.e. Rs. 7.50, what will be the treatment of remaining input credit of Rs. 11.50. Whether I would get refund of remaining credit and how much credit would I get?

You will be eligible for full ITC of Rs. 18/- paid on your inputs i.e. yarn but whatever credit remains unutilized will remain in your electronic credit ledger and no refund of the same will be allowed. 

Question: I have a manufacturing unit of Cotton trouser where customer gives me fabric and I have to convert it into trouser. What would be the rate applicable on me 5 %& or 18 %&?

The services provided by you fall under the category of job work by virtue of the definition of job work provided under Section 2 (68) of the CGST Act, 2017. The rate for job work in relation to trouser, which is a wearing apparel, is 18%.

Question: What is the difference between Fabric and Made-ups? Whether Shawl is a fabric or apparel or made-up. What is the rate on Shawls?

Shawls fall in the category of articles of apparel and clothing accessories and are classified under heading 61.17, if knitted or crocheted and under heading 62.14, if not knitted or crocheted. The rate of tax is 5% if the sale value of shawl does not exceed Rs.1000/- per piece and the rate is 12% if the sale value exceeds Rs.1000/- per piece.

Question: Dress material are sold by length. They can include upto 3 pieces. These can be plain or embroidered (value-addition or further worked upon). Where should dress material be classified?
Dress sets are classified under heading 6307 and the rate of tax on the dress materials/patterns is similar to the apparels i.e. for dress material of sale value not exceeding Rs.1000/-, tax at 5% would be charged and for dress material of sale value exceeding Rs.1000/-, tax at 12% would be charged.
Question: I am an un-registered trader dealing in textile fabrics which was exempted from tax under the State VAT Act. If I get registered under the GST Act, will I be eligible to avail of input tax credit on my stock of goods lying on the appointed day?

Since the goods you are dealing with are exempted from tax under the State Act, you will not be eligible to avail input tax credit as SGST under the SGST Act, 2017 on your stock of goods lying on the appointed day.

But, you will be eligible to enjoy CENVAT credit as Central Tax on your stock if you have invoices or other prescribed documents evidencing payment of excise duty under the existing law and such invoices/prescribed documents were issued not earlier than twelve months immediately preceding the appointed day.

You are allowed to enjoy the scheme for six months from the appointed day or till such stock is sold out, whichever is earlier, and tax paid by you shall be credited as central tax in your electronic credit ledger.

Question: Will drawback at higher rate be available to handicraft exporters who do not avail Input Tax Credit (ITC) like presently available to those who do not avail CENVAT credit?

No. There will be no difference in rate of Drawback for exporters not availing ITC in GST regime.  In GST regime, drawback will be admissible only at lower rate determined on the basis of customs duties paid on imported materials used in the manufacture of export goods. However, as an export facilitation measure, for the transition period of 3 months from July to September, 2017, drawback at higher composite rates will continue to be granted subject to the condition that no input tax credit of CGST/IGST is claimed, no refund of IGST paid on export goods is claimed and no CENVAT credit is carried forward.

Question: Would GST be payable on goods not intended to be sold, taken out for participation in overseas exhibitions and trade fairs and brought back into India as these goods are meant for exhibition only?

GST is not payable in such cases. Exporters will need exhibition participation letter and no foreign exchange involved letter from the concerned bank for the purpose of exchange control requirements. At the time of re-import, identity of goods imported with export goods needs to be established to seek exemption from import duty in accordance with Customs provisions.  IGST will be exempted at the time of re-import in view of exemptions granted under Customs.

Question: Will an exporter be required to pay GST in case of goods procured from unregistered persons?

In case of supply by an unregistered person, the registered person i.e., exporter shall be liable to pay GST under reverse charge mechanism for purchases above five thousand rupees in a day. However, the exporter can avail ITC of such GST paid and either utilize the ITC or claim refund of the same.

Question: Is GST payable on Agency Commission earned by buying agents of foreign buyers?

Yes, since commission is received by Agents in India and the place of supply of service is in India, GST will be payable.

Question: We get order form a foreign agent abroad to whom we pay commission. Will it be taxable under GST?

The foreign agent, who facilitates the supply of goods, is included within the definition of intermediary. The place of supply of service for services provided by intermediary would be the location of service provider, i.e., the place where he is registered. Since a foreign agent is located outside India and not registered in India, the commission paid to him will not be taxable.

Question: What is reverse charge in GST Law?
As per Section 2 (98) of the CGST Act, 2017, “reverse charge” means the liability to pay tax by the recipient of supply of goods or services or both instead of the supplier of such goods or services or both under subsection (4) of Section 9 of the CGST Act, 2017, or under subsection (3) or subsection (4) of section 5 of the IGST Act, 2017.
Question: Would GST be payable on goods taken out for participation in overseas exhibitions and trade fairs and brought back into India as these goods are meant for exhibition only?

GST is not payable in such cases. Exporters will need exhibition participation letter and no foreign exchange involved letter from the concerned bank for the purpose of exchange control requirements. At the time of re-import, identity of goods imported with export goods needs to be established to seek exemption from import duty in accordance with Customs provisions. IGST will be exempted at the time of re-import in view of exemptions granted under Customs.

Question: Will the principle of unjust enrichment apply to exporters or not?

The principle of unjust enrichment is not applicable in case of exports of goods or services as the recipient is located outside the taxable territory.

Question: Whether “Merchanting Trade” attracts GST?

Since neither the Goods being supplied in India nor the services, hence GST is not leviable on merchanting trade.

Question: Whether high sea sale will be applicable for GST?

IGST on high sea sale transactions of imported goods whether one or multiple, shall be levied and collected only at the time of importation that is when the import declarations are filed before the Customs authorities for the Customs clearance purposes for the first time.

Question: What are the changes made in Duty Drawback Scheme to allow the existing drawback for exports made in the GST regime?
In order to ensure smooth transition to the GST regime, Government has allowed the current Duty Drawback scheme to continue for a period of three months, i.e. from 1.7.2017 to 30.9.2017. The exporter during this period, continues to claim the composite rates, i.e. rates and caps given under columns (4) and (5) respectively of the Schedule of AIRs of duty drawback. During the transition period, exporters can also claim Brand rate of duty/tax incidence as they have been doing earlier. The conditions imposed for claiming these composite rates aim to ensure that the exporters do not claim composite AIRs of duty drawback and simultaneously avail input tax credit of Central Goods and Services Tax (CGST) or Integrated Goods and Services Tax (IGST) on the export goods or on inputs and input services used in manufacture of export goods or claim refund of IGST paid on export goods. Further, an exporter claiming composite rate shall also be barred to carry forward Cenvat credit on the export goods or on inputs or input services used in manufacture of export goods in terms of the CGST Act, 2017.
Question: Can we claim Input Tax Credit with Duty Drawback in the period from 1.7.2017 and 30.9.2017?
While a transition period of three months has been allowed, the exporters shall have an option to claim only Customs portion of AIRs of duty drawback, i.e. rates and caps given under column (6) and (7) respectively of the Schedule of AIRs of duty drawback and avail input tax credit of CGST or IGST or refund of IGST paid on exports.
 

(As per GST Council announcement in its meeting held on 06.10.2017 Merchant Exporters will now have to pay nominal GST of 0.1% for procuring goods from domestic suppliers for export).

Question: If we are preparing invoice for exports, should we apply customs exchange rate for payment of IGST?
The rate of exchange for the determination of the value of taxable goods or services or both shall be the applicable reference rate for that currency as determined by the Reserve Bank of India on the date of time of supply in respect of such supply in terms of section 12 or, as the case may be, section 13 of the CGST Act.
Question: We are supplying under “Deemed Exports”. How can we claim refund?
 Please ensure that the supply you are effecting is classified as deemed exports as the category may have undergone a change in GST. However, if it is covered as deemed exports, you will have to charge the applicable GST. The refund, if any, shall be claimed by the recipient. Please go through section 147 of CGST Act.
 
 
Question: We get order from a foreign agent abroad to whom we pay commission. Will it be taxable under GST?
The foreign agent, who facilitates the supply of goods , is included within the definition of intermediary. The place of supply of service for services provided by intermediary would be the location of service provider, i.e. the place where he is registered. Since a foreign agent is located outside India and not registered in India, the commission paid to him will not be taxable.
Question: How GST will be paid on the conversion of foreign currency? Will it be on full value after conversion or some other formula will be applied?
 For a currency when exchanged to Indian Rupee, the value of taxable purpose shall be equal to the difference in the buying rate /selling rate, as the case may be, and the RBI reference rate for the currency at that time multiplied by the total value of unit. In case RBI reference rate is not available for the currency, the value will be gross amount of Indian Rupee provided or received by the person changing the money.
 
Question: Can you suggest the same with an example for better clarity?
 For example, if a person converts USD 1000 @ Rs 63 and RBI reference rate is Rs 64, then the taxable value will be (Rs 64-63 x 1000) Rs 1000 on which applicable GST will be charged. If a person converts 1000 Turkish Lira  at Rs 18.50  assuming there is no RBI reference rate, taxable value will be 1% of Rs 18500 = Rs 185 on which applicable GST will be charged.
 
Question: Whether factory stuffing facility under excise supervision continues under GST?
Under the GST, it has been decided to do away with the sealing of containers with export goods by CBEC officials. Instead, self-sealing procedure is allowed, with effect from 1st September 2017, subject to the following: a) The exporter shall be under an obligation to inform the details of the premises whether a factory or warehouse or any other place where container stuffing is to be carried out, to the jurisdictional customs officer. b) The exporter should be registered under the GST and should be filing GSTRI and GSTR2. Where exporter is not a GST registrant, he shall bring the export goods to a Container Freight Station/Inland Container Depot for stuffing and sealing of container.
However, in certain situations, an exporter may follow the self-sealing procedure even if he is not required to be registered under GST Laws. Such an exception is available to the Status Holders (One, Two, Three, Four and Five Star Export Houses) recognized by DGFT under a valid status holder certificate issued in this regard. 
It has been decided that the above revised procedure regarding sealing of containers shall be effective from 01.09.2017. Therefore, the existing practice of sealing the container with a bottle seal under Central Excise supervision or otherwise would continue.
 
 
Question: What will be the exact procedure of obtaining permission from Customs?
The exporter shall inform the jurisdictional Custom Officer of the rank of Superintendent or Appraiser of Customs, at least 15 days before the first planned movement of a consignment from his factory/premises, about the intention to follow self-sealing procedure to export goods from the factory premises or warehouse. The jurisdictional Superintendent or an Appraiser or an Inspector of Customs shall visit the premises from where the export goods will be stuffed and sealed for export. The jurisdictional Superintendent or Inspector of Customs shall inspect the premises with regard to viability of stuffing of container in the premises and submit a report to the jurisdictional Deputy Commissioner of Customs or as the case may be the Assistant Commissioner of Customs within 48 hours. The jurisdictional Deputy Commissioner of Customs or as the case may be the Assistant Commissioner of Customs shall forward the proposal, in this regard to the Principal Commissioner/Commissioner of Customs who would grant permission for self-sealing at the approved premises. Once the permission is granted, the exporter shall furnish only intimation to the jurisdictional Superintendent or Customs each time self-sealing is carried out at approved premises. The intimation, in this regard shall clearly mention the place and address of the approved premises, description of export goods and whether or not any incentive is being claimed. 
 
Question: How soon will refund of ITC in respect of export of goods or services be granted during the GST regime?
In case of refund of tax on inputs used in exports:
 
-Acknowledgement will be issued within 15 days from the date of application for refund
 
-Refund of 90% will be granted provisionally within seven days of acknowledgement of refund application.
 
-Remaining 10% will be paid within a maximum period of 60 days from the date of receipt of application complete in all respects.
 
-Interest @ 6% is payable if full refund is not granted within 60 days.
Question: What is the procedure for IGST refund on exports?
 No application for refund is to be made for IGST as the Shipping Bill itself is a claim for refund. In the case of refund of IGST paid on exports: Upon receipt of information regarding furnishing of valid return in Form GSTR-3 by the exporter from the common portal, the Customs shall process the claim for refund and an amount equal to the IGST paid in respect of each shipping bill shall be credited to the bank account of the exporter.
 
 
Question: Will the principle of unjust enrichment apply to exporters or not?
 The principle of unjust enrichment is not applicable in case of exports of goods or services as the recipient is located outside the taxable territory.
 
Question: Unfortunately it is still not clear for us what is the correct declaration to be provided in the Shipping Bill for Drawback: DBK001, DBK002, DBK003. The all India rates of Drawback are not giving any higher rates of Drawback. For example Chapter 28/29 has approximately 1.1%& Drawback. Can you please enlighten us?
The drawback rate, both when Cenvat is availed and Cenvat is not availed, is the same  which shows that the drawback rates only factor the basic customs duty on the inputs used in such exports. In such situation, you can claim the drawback benefit (stating that you are claiming lower drawback benefit as given in column 6 of the drawback schedule, though it is irrelevant) and claim either IGST refund or ITC refund or carry forward of Cenvat benefit. If you want to claim IGST refund (after adjusting ITC) on exports, you may give the declaration DBK002 and DBK003. If you want to claim ITC refund (exporting without payment of IGST against execution of Bond/LUT), you may give the declaration DBK001 and DBK003.
 
Question: Where we have to file our claim for GST refund as the jurisdiction of authority is not known to us?
 The refund for ITC or IGST would be filed on the common portal (GSTN) and not to any tax authorities. The approval for the same will be given electronically and amount of refund will be credited to your bank account.
 
Question: We are merchant exporters with principal place of Business as Chennai. We are outsourcing the material for exports from Andhra Pradesh (AP) and are exporting from port at Krishnapatnam in AP. We have no registered branch office in AP. Are we required to register at AP for additional place of business? Where to mention Code of Chennai and AP in the shipping bill?
 Please bear in mind that the principal place of business and additional place of business are confined to a State only. If you are outsourcing the material for exports from AP, you need not register in AP as only the supplier is required to be registered in the State from which goods are being supplied. In the shipping bill, State code of the exporter is required to be quoted at master level which is the first two digit of the GSTIN of the exporter, where you will give code of Tamil Nadu. At the item level, you can give the State of Origin which should be the State from which goods were procured for exports, where you will mention AP.
 
Question: We are a Merchant Export House. Our Principal place of Business is Mumbai, with a Branch in Rajkot. Our Activity in Rajkot is Inspection, Packaging and Painting of various goods purchased from Gujarat. In the Pre-GST regime, we used to buy Goods from various suppliers in Rajkot and send them to our Branch Office for inspection, painting and packaging, and export out of our Rajkot Office through Mundra Port. What will be the procedure in GST regime?
Since you have business interest in Mumbai and Rajkot, I am sure, you are having two separate GSTIN for Maharashtra and Gujarat. Your Gujarat unit will raise an invoice on Maharashtra by paying the applicable IGST. When you export to Mundra under LUT, you are not required to pay IGST. The IGST paid by you for supply from Unit in Gujarat will be available as Input Tax Credit (ITC) which in case of export would be refunded through the formula prescribed for such refund.
 
Question: Whether commission received by Indian Buying Agent from foreign customer in foreign currency is exempted from GST? Does Buying Agent need to register for GST?
 The commission received by buying agent in India will be taxable. The buying agent should register so that he/she can claim ITC to lessen his/her liability by using ITC
Question: We have been given LUT acceptance valid till 31.3.2018 whereas I am given to understand that the LUT would be valid for 1 year from the date of acceptance. Would appreciate knowing which is the correct date?
Legal Undertaking (LUT) is valid for a Financial Year (201718 for this year). Thus all LUTs executed from 1st July onwards will be valid till 31st March, 2018. There is, however, no validity of a bond which is a running account as debiting /crediting is allowed in a bond.
 
Question: Whether goods sent by an exporter to a job worker will be liable to GST?
 No, the goods sent by an exporter to a job worker is not a supply, as there is no transfer of title and no consideration for the goods is involved. In terms of section 143 of the CGST Act, 2017 a registered taxable person (the principal) may send any inputs or capital goods, without payment of GST, to a job worker for job work and the principal shall either i) bring back such inputs or capital goods after completion of job work or otherwise within the prescribed period, i.e. 1 year in case of inputs and 3 years in case of capital goods, or ii) supply such inputs or capital goods within such prescribed period on payment of tax within India, or with or without payment of tax for export, as the case may be.
If the goods or, capital goods, as the case may be, are not returned to the principal within the time specified above, the same shall be deemed to have been supplied by the principal to the job worker on the date the goods were sent out to the job worker and the principal shall be required to pay tax accordingly on such supplies.
 
Question: We are textile manufacturer and have stocks carried forward on 1st July. Will I get benefit of GST on such stocks?
Full credit of the tax paid on the stocks would be available if the documents evidencing tax payment are available. However, if only documents relating to procurement are available with no documents evidencing tax payment, deemed credit would be admissible in respect of textiles only if the goods were taxable under the Central Excise Act. Such credit would be available after the tax has been paid on supply of these goods. This facility is available for 6 months period only or till the date of sale of such stock whichever is earlier and is limited to 40% of the central tax paid by you.
 
Question: We get orders from NCR exporters for supply of goods for which material is supplied by exporters. Do we charge GST when we return the goods and at what rates?
The services provided by you fall under the category of job work by virtue of the definition of job work provided under Section 2 (68) of the CGST Act, 2017. The rate for job work is 18%. Except for few processes for which it is 5%. You should thus charge 18% on jobbing charges.
 
Question: We have stock of GST paid inputs as well as inputs from preGST period and if inputs from both lots are used in export goods, what shall be Drawback on such exports?
During the transition period up to 30th September, 2017, exporters can avail drawback at higher rate subject to the conditions that no Input Tax Credit (ITC) of CGST/IGST is claimed, no refund of IGST paid on export goods is claimed, and no CENVAT credit is carried forward
Question: Is the threshold limit of Rs 20 lacs applicable for all commissions received from our suppliers within India and received in foreign currency from our principals out of India ?
The turnover under GST covers taxable, zero rated and exempt supplies and thus both domestic commission and overseas commission will be part of the turnover.
Question: If the commission received in Indian Rupees from suppliers within the state of Gujarat & total commission is within 20 lacs? Please advice if GST would be applicable to us ?
If the total commission is below the threshold limit and there is no inter -state supply , you may avail exemption from registration but in such case , the person providing commission will have to pay the GST on RCM basis.
Question: If the commission in Indian Rupees from suppliers outside the state of Gujarat & the total commission is within the 20- lacs threshhold limit , Please advice if GST would be applicable to us ?? In this i also would like to know the status of those companies which are outside the state of gujarat but having registration within the state for either branch office or sales office or godown – what would be the status of the commission – Will this be treated as within the state of Gujarat ?
Any inter-state supply can be effected by a registered person only and thus even in case the turnover remains  below Rs 20 lakh , registration would be required. Therefore , GST would be payable. If you are making supply to a company having branch  in Gujarat , I hope the branch will have separate GSTIN and thus such supply will be within state unless you supply at the instruction of head office (which is outside state) to a branch in the Gujarat  state.
Question: In case of commission earned in Foreign Currency – if the total amount received remains within the threshold limit of 20 lacs , do we need to file GST ?
Overseas commission may be treated as inter- state supply  and thus registration may be mandatory though turnover may be below the threshold limit.

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