Export – Import in GST regime

Export – Import in GST
regime
(Updated As On 15.08.2017)
Sanjay A.Sonawane
M.COM,G.D.C And.A,EXIM,DITM,PGDBA
http://swayambhugroup.com/

Acts & Rules:
 THE CENTRAL GOODS AND SERVICESTAX ACT, 2017 [CGST ACT]
 CENTRAL GOODS AND SERVICESTAX (CGST) RULES, 2017 [CGST RULES 2017 ]
 THE INTEGRATED GOODS AND SERVICESTAX ACT, 2017 [IGST ACT]
 THE…………….. STATE GOODS AND SERVICES TAX ACT, 2017 [SGST ACT]
 THE UNION TERRITORY GOODS AND SERVICES TAX ACT, 2017 [UTGST ACT]
 THE GOODS AND SERVICES TAX (COMPENSATION TO STATES) ACT, 2017.
 THE CUSTOMS ACT, 1962
 FOREIGN TRADE (DEVELOPMENT & REGULATION) ACT, 1992 [FT&DR ACT]
 FOREIGNTRADE POLICY (2015-20)

Definitions:
 “Export of goods” with its grammatical variations and cognate
expressions, means taking goods out of India to a place outside
India; Section 2 (5) of IGST Act 2017
 “Export of services” means the supply of any service when,––
(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; and
(v) the supplier of service and the recipient of service are not merely
establishments of a distinct person in accordance with Explanation 1
in Section 8; Section 2 (6) of IGST Act 2017

Definitions:
 “Import of goods” with its grammatical
variations and cognate expressions, means
bringing goods into India from a place outside
India; Section 2 (10) of IGST Act 2017
 “Import of services” means the supply of any
service when,––
(i) the supplier of service is located outside India;
(ii) the recipient of service is located in India; and
(iii) the place of supply of service is in India;
Section 2 (11) of IGST Act
2017

Definitions:
 “Special Economic Zone” shall have the
same meaning as assigned to it in clause (za)
of section 2 of the Special Economic Zones Act,
2005;
Section 2 (19) of IGST Act 2017
 "Special Economic Zone" means each
Special Economic Zone notified under the
proviso to sub-section (4) of section 3 and
sub-section (1) of section 4 (including Free
Trade and Warehousing Zone) and includes
an existing Special Economic Zone;
Section 2 (za) of SEZ Act
2005

Definitions:
 “Conveyance” includes a vessel, an aircraft and
a vehicle; Section 2 (34) of CGST Act
2017
 “Deemed Exports” means such supplies of
goods as may be notified under section 147;
Section 2 (39) of CGST Act
2017
 “Invoice” or “Tax Invoice” means the tax
invoice referred to in section 31 Section 2
(66) of CGST Act 2017
 “zero-rated supply” shall have the meaning
assigned to it in section 16;
Section 2 (23) of IGST Act 2017

“Zero- Rated Supply”
Section 16 of 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 unit.

“Zero- Rated Supply”
Section 16 of IGST Act
(3) A registered person making zero rated supply shall be eligible to claim
refund under either of the following options, namely:––
(a) he may supply goods or services or both under bond or Letter of Undertaking,
subject to such conditions, safeguards and procedure as may be prescribed, without
payment of integrated tax and claim refund of un utilised input tax credit; or
(b) he may supply goods or services or both, subject to such conditions, safeguards and
procedure as may be prescribed, on payment of integrated tax and claim refund
of such tax paid on goods or services or both supplied, in accordance with the
provisions of section 54 of the Central Goods and ServicesTax Act or the rules made
there under.

Export of Goods : Merchant
Exporter
Finished Goods:
• Excise Duty – CT1
• SalesTax – H Form
• Octroi - N Form
Finished Goods:
ARE – 1
(Jointly Signed)
Export Documents
• Export Invoice
• Packing List
• Shipping Bill
• ARE-1 Jointly SignedB1 – BOND
PRE
GST

Export of Goods : Manufacturer Exporter
Inputs:
• Excise Credit
•VAT Credit
Finished Goods:
ARE – 1
Export Documents
• Export Invoice
• Packing List
• Shipping Bill
• ARE-1
LUT or REBATE
PRE
GST

For
Exports
POST
GST
MERCHANT EXPORTER MANUFACTURER
EXPORTER
FINISHED GOODS +
SERVICES
RAW MATERIALS +
SERVICES
Finished Goods:
• Excise Duty – CT1
• SalesTax – H Form
• Octroi - N Form
• ARE-1
• Service Tax Credit/Refund
Inputs:
• Excise Credit
•Vat Credit
• ARE-1
• ServiceTax Credit
PAY APPLICABLE GST
(i.e CGST+SGST/UTGST or IGST)
GST PAID
WILL BE AVAILABLE AS INPUTTAX CREDIT

POST
GST
Without payment of
IntegratedTax (IGST)
(LUT/BOND -A ROUTE)
With Payment of IGST
(PAYMENT & REFUND
- B ROUTE)
Supply Goods or Services
or both
Supply Goods or Services
or both
Under LUT or BOND as
prescribed in Rules 96 A
of CGST Rules 2017
And claim Refund of IGST paid
as per Rule 96 of CGST Rules
2017
Refund of InputTax Credit will
refunded as per formula under
Rule 89(4) of CGST Rules 2017
by prescribed Application.
(GST-RFD 01)
No Separate Application is
required,
Shipping Bill
EGM or Export Report by
conveyance carrying the export
goods
and FORM GSTR-3 / 3B
(Supply for Exports or to SEZ)
A registered
person
(No Difference
between
Manufacturer
or Merchant
Exporter)

“Supply Export of Goods”
Under Bond or Letter of Undertaking Section 16(3) (a) of IGST Act
 Under Rule 96A of CGST Rules 2017 Form GST RFD 11 is
Notified for Submission of Bond / LUT
 The Bond/LUT is to be submitted to Jurisdictional Deputy /
Assistant Commissioner having jurisdiction over the principal
place of business of the exporter.
(Circular 2/2/2017 – GST Dt. 04.07.2017 & Circular
4/4/2017 – GST Dt. 07.07.2017)
 The Bond shall be furnished on non-judicial stamp paper of
the value as applicable in the State in which bond is being
furnished.

 The Bond Shall be a Running Bond and would
cover the amount of tax involved in the export
based on estimated tax liability as assessed
by the exporter himself .
 Bank Guarantee required along with bond as
security will be decided by Jurisdictional
Commissioner depending upon the track record
of exporter. If the Commissioner is satisfied with
the track record of an exporter then furnishing of
bond without bank guarantee would suffice. In
any case the bank guarantee should normally
not exceed 15% of the bond amount.
(Para 5 of Circular 4/4/2017 – GST Dt. 07.07.2017)

 A latest circular issued by GST Policy wing have
suggested Commissioner’s must take liberal view for
waving off Bank Guarantee.
 Some instances for liberal interpretation for waving
off Bank Guarantee
◦ An exporter registered with recognized Export
Promotion Council can be allowed to submit bond
without bank guarantee on submission of a self-
attested copy.

 Certain persons have been notified who intends to supply goods or services for export
without payment of integrated tax, for furnishing a Letter of Undertaking (LUT) in
place of a Bond.
(CBEC Notification No. 16/2017 Central Tax Dt. 07.07.2017)
 The following registered person shall be eligible for submission of Letter of Undertaking in
place of a bond:-
(a) a status holder as specified in paragraph 3.20 and 3.21 of the ForeignTrade 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 one crore rupees, in the preceding
financial year,
and
he has not been prosecuted for any offence under the Central Goods and Services Tax Act,
2017 (12 of 2017) or under any of the existing laws in case where the amount of tax
evaded exceeds two hundred and fifty lakh rupees. (2.5Cr)

 Clarity on the “1Crore realisation” condition
has be clarified by a latest circular of GST to
avoid any further confusion:
 Only such exporters are eligible to LUT facilities
who have received a remittance of Rs. one crore or
10% of export turnover, whichever is a higher
amount, in the previous financial year.
(Para 2 a. of Circular 5/5/2017 – GST Dt. 11.08.2017)

 A few illustrations are as follows:
◦ An exporter had a turnover of Rs. 15 crore in the previous financial year. He would be
eligible for LUT facility if remittance received against this export is Rs. 1.5 crore or more
(10% of export turnover is more than Rs. 1 crore)
◦ An exporter had a turnover of Rs. 5 crore in the previous financial year. He would be eligible
for LUT facility if remittance received against this export is Rs. 1.0 crore or more
(10% of export turnover is less than Rs. 1 crore)
◦ An exporter has an export turnover of Rs. 2 crore. He has received Rs. 80 lacs as foreign
inward remittances in FY 2016-17 which is 40% of the export turnover. He will not be
eligible for LUT facility as remittance received is less than Rs. 1 crore.
◦ An exporter has export turnover of Rs. 40crore. He has received Rs. 2 Crores as foreign
inward remittances in FY 2016-17 which is 5% of the export turnover. He will not be eligible
for LUT facility as remittance received is less than 10% of export turnover, even though it is
in excess of Rs. 1 crore.
◦ An exporter has received Rs. 1 Crore 10 lacs as foreign inward remittances in FY 2016-17
which is 20% of the export turnover. In this scenario, he will be eligible for LUT facility.
(Para 2 a. of Circular 5/5/2017 – GST Dt. 11.08.2017)

◦ In the GST regime, registration is State-wise which means that the
expression ‘registered person’ used in the said notification may mean
different registered persons (distinct persons in terms of sub-section
(1) of section 25 of the Act) if a person having one Permanent Account
Number is registered in more than one State.
It may so happen that a registered person may not satisfy the condition
regarding foreign inward remittances in respect of one particular
registration, because of splitting and accountable of receipts and
turnover across different registered person with the same PAN.
But the total amount of inward foreign remittances received by all the
registered persons, having one Permanent Account Number, maybe Rs. 1
crore or more and it also maybe 10% or more of total export turnover.
In such cases, the registered person can be allowed to submit
bond without bank guarantee.
(Para 2 . g of Circular 5/5/2017 – GST Dt. 11.08.2017)

 The LUT will be valid for 12 Months from the date of issue.
(Clarified at Sr. No. 6 of Circular 4/4/2017 – GST Dt. 07.07.2017)
 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 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 —
(a) fifteen days after the expiry of three months from the date of
issue of the invoice for export, if the goods are not exported out
of India; or
(b) fifteen days after the expiry of one year, or such further period
as may be allowed by the Commissioner, from the date of issue of
the invoice for export, if the payment of such services is not
received by the exporter in convertible foreign exchange.
(Rule 96A(1) of CGST Rules 2017)

 Documents for Bond or LUT to be submitted to Jurisdictional
Deputy / Assistant Commissioner are:
 Covering / Request Letter on your letterhead.
 Form GST - RFD 11
 Bond on Requisite Non-Judicial Stamp Paper (i.e Rs. 100/500)
or Letter of Undertaking [on your letterhead] (in Duplicate)
 Self Certified Copy of IEC
 Self Certified copy of GST Registration
 Self Certified copy of Status Holder Certificate (if applicable)
 Certificate from Bank for Remittance realisation proof Or Self Certified Copies
of e-BRC of Rs. 1 Crore or More
 Self Certified copy of RCMC from recognized Export Promotion Council.
 Bank Guarantee for % of BondValue as per Jurisdictional Commissioner but not
more than 15%
 Self Certified copy of PAN Card of 2 Witness in the Bond / LUT
 A Declaration certifying that the exporter is not prosecuted.
 Proof of Identity as Authorized Person who is signing the Bond/LUT.
 Any other document prescribed by Jurisdictional Officer.

Supply for Exports or SEZ: Goods or Services
Section 16(3) of IGST Act
Inputs / Finished Goods
or Services
• PAY APPLICABLE GST
PAID GSTWILL
BECOMEYOUR
INPUTTAX CREDIT
Without
payment of
IntegratedTax
(IGST)
(LUT/BOND -
A ROUTE)
With
Payment of
IGST
(PAYMENT &
REFUND
- B ROUTE)
Refund of ITC as per
Formula under Rule
89 (4)
Refund of IGST
Paid on Export
of Goods
as per Rule 96

“Refund of ITC for Export”
Under Bond or Letter of Undertaking Rule 89 of CGST Rules 2017
Refund Amount = (Turnover of zero-rated supply of goods x Net ITC
+Turnover of zero-rated supply of services)
------------------------------------------------------------------------------------------------------
AdjustedTotal Turnover
Where,-
(A) "Refund amount" means the maximum refund that is admissible;
(B) "Net ITC" means input tax credit availed on inputs and input services during the relevant period;
(C) "Turnover of zero-rated supply of goods" means the value of zero-rated supply of goods made during the
relevant period without payment of tax under bond or letter of undertaking;
(D) "Turnover of zero-rated supply of services" means the value of zero-rated supply of services made
without payment of tax under bond or letter of undertaking, calculated in the following manner, namely:-
Zero-rated supply of services is the aggregate of the payments received during the relevant period for
zero-rated supply of services and zero-rated supply of services where supply has been completed for
which payment had been received in advance in any period prior to the relevant period reduced by
advances received for zero-rated supply of services for which the supply of services has not been
completed during the relevant period;
(E) "AdjustedTotal turnover" means the turnover in a State or a Union territory, as defined under clause
(112) of section 2, excluding the value of exempt supplies other than zero-rated supplies, during the
relevant period;
(F) “Relevant period” means the period for which the claim has been filed.

 An Example of Refund of ITC for Export
under Bond or LUT:
As Per Formula the Refund Amount:
(1,00,000 + 0) x 18,000 = Rs. 9,000/-
2,00,000
Turnover of zero-rated
supply of goods for the
period - July 2017
Rs. 1,00,000/-
Turnover of zero-rated supply
of services – July 2017
Nil
Net Input Tax Credit 18,000/-
Domestic Supply – July 2017 Rs. 1,00,000/-

 Provided further that no refund of un utilised input tax credit shall be
allowed in cases where the goods exported out of India are subjected to
export duty. Section 54 (3) of CGST Act 2017
 Application of ITC Refund will be required to be made in
Form-GST-RFD-01
 Under Rule 89 (2) (b) of CGST Act 2017
a statement containing the number and date of shipping bills or bills of
export and the number and the date of the relevant export invoices, in a
case where the refund is on account of export of goods
 Under Rule 89(2) (c) of CGST Act 2017
a statement containing the number and date of invoices and the relevant
Bank Realisation Certificates or Foreign Inward Remittance Certificates, as
the case may be, in a case where the refund is on account of the export of
services

 Under Rule 89 (2) (d) of CGST Act 2017
a statement containing the number and date of invoices as provided in rule 46
along with the evidence regarding the endorsement specified in the second proviso
to sub-rule (1) in the case of the supply of goods made to a Special Economic
Zone unit or a Special Economic Zone developer;
 Under Rule 89(2) (e) of CGST Act 2017
a statement containing the number and date of invoices, the evidence regarding the
endorsement specified in the second proviso to sub-rule (1) and the details of
payment, along with the proof thereof, made by the recipient to the supplier
for authorised operations as defined under the Special Economic Zone Act, 2005,
in a case where the refund is on account of supply of services made to a
Special Economic Zoneunit or a Special Economic Zone developer;
 Under Rule 89(2) (f) of CGST Act 2017
a declaration to the effect that the Special Economic Zone unit or the Special
Economic Zone developer has not availed the input tax credit of the tax
paid by the supplier of goods or services or both, in a case where the refund
is on account of supply of goods or services made to a Special Economic Zone
unit or a Special Economic Zone developer;

Under Bond or Letter of Undertaking Form RFD-01 of CGST Rules 2017

Under Bond or Letter of Undertaking Rule 91/92 of CGST Rules 2017
 The proper officer, after scrutiny of the claim and the
evidence submitted in support thereof and on being
prima facie satisfied that the amount claimed as refund
will sanction 90% of the Refund amount not within a
period not exceeding seven days from the date of the
acknowledgement under sub-rule (1) or sub-rule (2) of
rule 90.
 The balance amount will be sanctioned within 60 Days
of the acknowledgement.
 In case of any delay, 6% p.a Interest will be paid on the
refund amount beyond 60 days.

“Refund of IGST Paid on Export”
Rule 96 of CGST Rules 2017
 Refund of IGST Paid under 16(3)(b) of IGST act and as per rule 96
of CGST Rules 2017.
(1) The shipping bill filed by an exporter 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
(b) the applicant has furnished a valid return in FORM GSTR-3 or
FORM GSTR-3B, as the case may be;

(2) 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.
(3) Upon the receipt of the information regarding the furnishing of
a valid return in FORM GSTR-3 or FORM GSTR-3B, as the
case may be 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.

GSTR3B-Table 3.1

GSTR1-Table 6A – Export Invoices

Export Documentation
 A registered person supplying taxable goods shall,
before or at the time of,—
(a) removal of goods for supply to the recipient, where the
supply involves movement of goods;
or
(b) delivery of goods or making available thereof to the
recipient, in any other case,
issue a tax invoice showing the description, quantity
and value of goods, the tax charged thereon and such
other particulars as may be prescribed
(Section 31 (1) of CGST Act 2017)

 Tax Invoice (as Per Rule 46 of CGST Rules) having 17 data as per a to q of the
said rule [amended vide Notification No. 17/2017 – Central Tax Dt. 27.07.2017]
 Provided also that in the case of the export of goods or services, the invoice shall carry
an endorsement
“SUPPLY MEANT FOR EXPORT/SUPPLYTO SEZ UNIT OR SEZ DEVELOPER
FOR AUTHORISED OPERATIONS ON PAYMENT OF INTEGRATEDTAX”
or
“SUPPLY MEANT FOR EXPORTT/SUPPLYTO SEZ UNIT OR SEZ DEVELOPER
FOR AUTHORISED OPERATIONS UNDER BOND OR LETTER OF
UNDERTAKINGWITHOUT PAYMENT OF INTEGRATEDTAX”,
as the case may be, and shall, in lieu of the details specified in
clause (e), contain the following details, namely,-
(i) name and address of the recipient;
(ii) address of delivery; and
(iii) name of the country of destination

 Rate of exchange of currency, other than Indian
rupees, for determination of value.
(1) The rate of exchange for determination of value of
taxable goods shall be the applicable rate of
exchange as notified by the Board under
section 14 of the Customs Act, 1962 for the
date of time of supply of such goods in terms of
section 12 of the Act.
(2) The rate of exchange for determination of value of
taxable services shall be the applicable rate of
exchange determined as per the generally
accepted accounting principles for the date of
time of supply of such services in terms of section
13 of the Act.”;
(Rule 34 of CGST Rules 2017 / as amended vide Notification No. 17/2017 Dt. 27.07.2017)

 The Shipping Bill or Bill of Export must be
indicate your GSTIN No. as well as exporter
must select the option of IGST Payment Status
and Taxable Amount and Tax Amount details
i.e P – Paid
LUT – LUT/Bond
NA – Exempted Goods
These details must be tallied to your TAX
INVOICE

Check List under IGST Paid

Shipping Bill Under LUT

 The GST & Refund system will do the match
making of Invoice No. details filed in your GST
Returns and details in your Shipping Bill or Bill of
Export in a common portal.
 Thus in order to avoid mismatch of Invoice No. It
is advisable to have same Invoice No. for your
TAX Invoice and Customs Invoice
 Custom Invoice / Commercial Invoice will remain
same in Foreign Currency and will have not
change except addition of GSTIN No and
Declaration of Export like under GST.

IEC
 IEC will continue and required for any person to Export
or Import of Goods or Service. However, the IEC no. is
now changed from 10 digit Numerical to 10 digit Alpha-
Numerical in way of the PAN NO.
 Thus, IEC No. will be same as PAN No. However,
application and issuance of IEC No. is still mandatory.
 Existing IEC Holders, have to continue with the IEC No.
allotted. DGFT will internally migrate the same, until
then, Exporters/Importers will be required to mention
their IEC No. along with GSTIN for their transactions.
(DGFTTrade Notice No. 09 Dated. 12.06.2017)

Export Incentives
 CUSTOMS
 DUTY DRAWBACK
 DGFT
 Advance Authorization
 Duty Free Import Authorization (DFIA)
 Merchandise Export from India Scheme (MEIS)
 Service Export from India Scheme (SEIS)
 Export Promotion Capital Goods Scheme (EPCG)
 Deemed Export

POST GST SCENARIO

Duty Drawback on Exports
 Section 2 (a) of The Customs, Central Excise
Duties and ServiceTax Drawback (Amendment)
Rules, 2006 defines: "drawback" in relation to any
goods manufactured in India and exported,
means the rebate of duty or tax, as the case
may be, chargeable on any imported
materials or excisable materials used or
taxable services used as input services in
the manufacture of such goods;
 It is basically refund of input taxes levied on the
export product.

 The figures shown in the said Schedule in columns (4) and
(5) (When CENVAT Not Availed :A)refer to the total
drawback (Customs, Central Excise and Service Tax
component put together) allowable and those appearing in
columns (6) and (7) (When CENVAT Availed : B) refer
to the drawback allowable under the Customs component.
The difference in rates between the columns (4) and (6)
refers to the Central Excise and Service Tax component of
drawback. If the rate indicated is the same in the columns (4)
and (6), it shall mean that the same pertains to only Customs
component and is available irrespective of whether the
exporter has availed of Cenvat facility or not.
(Sr. No. 7 to Notification 131/2016 Customs NT Dt. 31.10.2016)

 A new declaration is being added for the exporter to certify that no input tax credit of CGST/IGST has
been availed for any of the inputs or input services used in the manufacture of the export goods, or
that no refund of IGST paid on export goods shall be claimed. For the transition period, i.e. till the
exporters continue to have used inputs on which CENVAT was paid, there will be 3 declarations:
DBK001 - "I declare that no input tax credit of the Central Goods and ServicesTax or of the
Integrated Goods and Services Tax has been availed for any of the inputs or input services used in the
manufacture of the export goods."
DBK002 - "I declare that no refund of Integrated Goods and ServicesTax paid on export goods
shall be claimed.“
DBK003 - "I declare that CENVAT credit on the inputs or input services used in the
manufacture of
the export goods has not been carried forward in terms of the Central Goods and Services Tax Act, 2017.“
For Every Item where DBK claimed is suffix as A or C, an exporter is required to declare two codes only,
i.e.
DBK001 or DBK002 and (2) DBK003
(Public Notice No. 80/2017 Dated 27.06.2017 Issued by Office of Commissioner of Customs Nhava Sheva – I)

 As per notification No. 59/2017 - Cus (NT) dated 29.06.2017,certificate from
jurisdictional GST officer was required to claim higher drawback for transition period of 3
Months (i.e upto 30.09.2017) Govt. has decided to dispense the requirement of such
certificate from GST and exporter will get higher rate of drawback on the basis of self-
declaration.
 Exporters, are requested to provide the Self - Declaration as per revised Notes and
Condition 12A as notified vide Customs Notification 73/2017-Customs (NT) Dt.
26.07.2017
The above is in line with the DBK001, DBK002 and DBK003 declaration being declared in
S/Bill as per JNCH Publice Notice No. 80.
 The Circular has also further clarified that the requirement of the said self-declaration is
applicable w.e.f 01.07.2017 and for shipments already made exporters required to submit
One Single Declaration, format of which is attached in the said circular.3.The Circular
states, that for Goods which have been cleared from factory, warehouse etc.. prior to
01.07.2017,will be subject to documentation and procedure prior to GST and certificate
from Central Excise officer as applicable will continue. [Custom
Circular No. 32/2017 Dated 27.07.2017]

It must be clearly
noted that Higher
Duty Drawback and
IGST refund or Input
Tax Credit of GST is
mutually exclusive.

POST GST SCENARIO
ForeignTrade Policy (DGFT)

MEIS / SEIS [Chapter 3]
 The Duty Credit Scrips (issued under
Chapter 3 of the FTP) cannot be used
for payment of IGST and GST
compensation cess in imports, and CGST,
SGST, IGST and GST compensation cess
for domestic procurement.
 Scrips will only be used to debit the
Basic Customs Duty

Advance Authorisation [Chapter 4]
 Under the GST regime, no exemption from payment of Integrated GST and
Compensation Cess would be available for imports under Advance
Authorisation.
 Importers would need to pay IGST and take input tax credit as applicable
under GST rules.
 However, imports under Advance Authorisation would continue to be
exempted from payment of Basic Customs Duty,Additional Customs Duty
specified under Section 3(1), 3(3) and 3(5) of the Customs Tariff Act, Education
Cess,Anti-dumping Duty, Safeguard Duty and Transition Product Specific
Safeguard Duty, wherever applicable.
 Advance Release Order facility shall not be available for procurement of
inputs under Advance Authorization scheme except for inputs listed in
Schedule 4 of Central Excise Act, 1944 read withThe Taxation Laws
(Amendment) Act 2017 No 18 of 2017, with effect from July 1, 2017.

DFIA [Chapter 4]
 No Changes under DFIA, previously on BCD is
exempted.
 Under the GST regime, also no exemption from
payment of Integrated GST and Compensation Cess
would be available for imports under DFIA.
 Importers would need to pay IGST and take input
tax credit as applicable under GST rules.
 Rest of the FTP provisions of DFIA remain same.

EPCG [Chapter 5]
 Importers would need to pay IGST and take input tax
credit as applicable under GST rules.
 ARO facility shall not be available for sourcing of Capital
Goods manufactured indigenously
 Only BCD will be allowed to be debited under EPCG.
EPCG export Obligation will be adjusted accordingly to
duty saved value.
 IGST paid on Import of Capital Goods will be allowed as
InputTax Credit in the same Financial Year unlike the
previous regime. (Split in 2Years)

EOU & Supply to EOU [Chapter 6]
 EOU would continue to get exemption of BCD on their imports,
However GST as well as Compensation Cess will be leviable on the
same.
 Items outside the GST regime continue to get complete exemption
as before.
 EOU’s Purchase will not have ab-initio exemption as previously
held.They will be required to pay GST and will get the same as ITC.
Thus, Exporters supplying to EOU units will bill it almost as local
transaction billing.
 GST law has not yet notified any deemed Export categories,
However, under FTP Supply to EOU is Deemed Export and same is
still valid, and will apply for discharge of any Export Obligation
under FTP.

Deemed Exports [Chapter 7]
 The supplies made to different deemed exports categories prior to the
date of operationalization of GST, (i.e 01.07.2017 ) the benefits would be
available as per the provisions existed before operationalization of GST.
 “deemed exports” means such supplies of goods as may be
notified under section 147 (Section 2 (39) of CGST Act 2017)
 The Government may, on the recommendations of the
Council, notify certain supplies of goods 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, if such goods are manufactured
in India. (Section 147 of CGST Act 2017)

Factory Stuffing:
(CBEC Circular 26/2017 Cus Dated: 01.07.2017)
 In the past issued various circulars both on the Excise and
Customs side on the issue of sealing of containers.There are
three categories of containers which arrive at the port/ICD:
a. Containers stuffed at factory premises or warehouse under
self-sealing procedure.
b. Containers stuffed / sealed at factory premises or
warehouse under supervision of central excise officer.
c. Containers stuffed and sealed at Container Freight Stations/
Inland Container Depot.
 It has been decided to do away with the sealing of containers
with export goods by CBEC officials.The New Self Sealing
procedure will be followed. (i.e combining “b” into “a” as above)

Factory Stuffing:
 The New Self Sealing procedure will be followed w.e.f
01st Sept 2017 :
 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.
 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.

Factory Stuffing:
 Exporter desirous of availing this procedure 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/her 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 & sealed for export to check with regard to viability of stuffing of container in the premises
and submit a report within 48 hours.
 Principal Commissioner/Commissioner of Customs 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.
 Self-Sealing permission once given by a Principal Commissioner/Commissioner of Customs shall be valid for export at
all the customs stations.The customs formation granting the self sealing permission shall circulate the permission along
with GSTIN of the exporter to all Custom Houses/Station concerned.
 The exporter shall seal the container with the tamper proof electronic-seal of standard specification.
 The electronic seal should have a unique number which should be declared in the Shipping Bill.
 Before sealing the container, the exporter shall feed the data such as name of the exporter, IEC code, GSTIN number,
description of the goods, tax invoice number, name of the authorized signatory (for affixing the e-seal) and Shipping Bill
number in the electronic seal.Thereafter, container shall be sealed with the same electronic seal before leaving the premises.
Name of the authorized signatory (for affixing the e-seal) and Shipping Bill number in the electronic seal.Thereafter,
container shall be sealed with the same electronic seal before leaving the premises.

Imports
 In the GST regime, IGST and GST Compensation
cess will be levied on imports by virtue of sub-
sections (7) &(9) of Section 3 of the Customs
Tariff Act, 1975.
 Barring a few commodities which attract levy of
CVD, majority of imports would attract levy of
IGST.
 Further, a few products such as aerated waters,
tobacco products, motor vehicles etc, would also
attract levy of GST Compensation Cess, over and
above IGST.

Imports
 IGST will be applicable to all imports as per description
of goods and tariff headings in the relevant schedules of
the notification.
(IGST Notification No. 01/2017 IGST (Rate) Dated. 28.06.2017)
 The rates applicable to goods of Chapter 98 are as
under:
◦ 9801- Project Imports- 18%
◦ 9802- Laboratory Chemicals- 18%
◦ 9803- Passenger baggage – Nil Rate
◦ 9804- Specified Drugs and medicines for personal use- 5%
◦ 9804- Other drugs and medicines for personal use- 12%
◦ 9804- All other dutiable goods for personal use- 28%

Imports : Duty Calculation
 Suppose the assessable value of an article imported into India is Rs. 100/-.
 Basic Customs Duty is 10%[ad-valorem]
 Integrated tax rate(IGST) is 18%.
Sr. No Details Amount Remarks
1 AssessableValue Rs. 100/-
2. Basic Customs Duty (BCD) Rs. 10/- 10%
2a. Secondary Education Cess Rs. 0.20/- To be applied on Sr. No. 2
2b. Higher Secondary Education
Cess
Rs. 0.10/- To be applied on Sr. No. 2
3. IGST Rs. 19.85/- 18%
To be applied on Sr.
1+2+2a+2b
[100+10+0.20+0.10 =
110.30]
4. Total Import Duty: Rs. 30.15/- Sr. 2+2a+2b+3

Sanjay A.Sonawane M.Com,G.D.C andA,EXIM,DITM,PGDBA

Export – Import in GST regime

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