Export of Goods/Service out of India as well as supplies to SEZ Unit/Developer is treated as Inter-state supply and hence IGST would be payable where it is on payment of tax.
Input Tax Credit is available for making zero-rated supplies. It is available even when such supply is an exempt supply.
Where the goods or services are exported without payment of tax, refund of unutilized ITC can be claimed and where goods or services are exported on payment of IGST, refund of such tax paid can be claimed. Thus, goods or services exported are relieved of GST either an input stage or at final product stage.
Two methods have been prescribed where the goods/services are to be exported without payment of tax viz.
i) Export under Letter of Undertaking(LUT)
ii) Export under Bond
Exporters fulfilling the following conditions are eligible for export under LUT:
(a) a Status Holder as specified in Paragraph (5) of Foreign Trade Policy 2015-2020; or
(b) who has received the due foreign inward remittances amounting to a minimum of 10% of the export turnover, which should not be less than Rupees One Crore, in the preceding financial year; and
(c) the exporter is not prosecuted for any offence under CGST or under any of the existing laws where the amount of tax exceeds Rs.250 Lakh.
LUT is required to be furnished in duplicate to the GST Officer having jurisdiction over the principal place of business of the exporter on a non-judicial stamp paper of Rs.500/- It is valid for 12 months from the date of its issue. Failure to fulfill the conditions specified above may require the exporter to furnish a bond.
Other exporters are required to furnish a running bond supported by a bank guarantee for an amount as may be decided by the Commissioner. It, however, cannot exceed 15% of the bond amount.
The existing LUTs/Bonds can be used till 31.07.17. Exporters must furnish LUTs/Bonds in the revised formats on or before 31.07.17 in Form GST RFD 11.
A registered person is required to pay tax + applicable interest within 15 days after the expiry of three months from the date of issue of invoice for export if the goods are not exported out of India.
In respect of export of service, such period is 15 days after the expiry of one year from the date of issue of invoice, if the payment of such service is not received by the exporter in the convertible foreign exchange.
In case of export of goods, Shipping Bill is the only document required to be filed with the Customs for making exports. Requirement of filing ARE-1/ARE-2 is dispensed with.
There is no concept of Merchant Export under GST Law. Hence, the merchant exporter has to procure goods from the manufacturer on payment of GST and export the goods. Thus, procedure of CT-1 Certificate is done away with.
Place of supply of goods exported out of India shall be the location outside India.
The place of supply of service where location of the supplier or location of the recipient of service is outside India except certain services is the location of the recipient of service.
Where the location of the recipient of service is not available in the ordinary course of business, the place of supply is the location of the supplier of services.
Export of goods to Nepal & Bhutan will be treated as “Zero Rated Supply” as it fulfils the condition of GST Law i.e. taking of goods out of India to a place outside India. Such exports will qualify for all benefits available to “Zero Rated Supplies” under GST Law.