Exporters under GST, Zero Rated Exports under GST; Form RFD-11; All you need to know about Refund and IGST
Exports of goods and services under GST are zero rated. However, there are some fine points you need to know before you start to export your product. We will discuss this in our article.
Sec 16 of IGST Act, 2017: Zero rated supply
The below post explains about Zero rated supply under section 16 of IGST Act,2017.
Section 16 of IGST Act, 2017 explains Zero rated supply as below: (The amendments if any will also be updated here soon).
The extract of Section 16 of IGST Act,2017 quoted below:
16 Zero rated supply.
16. (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.
(2) Subject to the provisions of sub-section (5) of section 17 of the Central Goods
and Services Tax Act, credit of input tax may be availed for making zero-rated supplies,
notwithstanding that such supply may be an exempt supply.
(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 unutilised 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 Services Tax Act
or the rules made thereunder.
Choice 1 – Supply under a Bond
1. A Bond (in nature of Indemnity bond) in Form GST RFD-11 is executed on non-legal stamp paper between the exporter and the Government through President of India. As a move arrangement, fares might be permitted under existing Bonds till July 31, 2017, by which date, the previously mentioned Form GST RFD-11 must be outfitted for future fares.
2. The Bond require not be given independently for each fare as this would make the consistence troublesome. The Bond would resemble a running Bond (with charge/credit office)
3. The Bond ought to adequately cover the measure of duty required in the fare in light of evaluated impose obligation as surveyed by the exporter himself. The exporter might guarantee that the extraordinary assessment obligation on sends out is inside the bond sum. On the off chance that the bond sum is lacking to cover the expense risk in yet to be finished fares, the exporter should outfit a crisp attach to cover such obligation.
4. As a simplicity of consistence, the Bond might be acknowledged by the jurisdictional Deputy/Assistant Commissioner having locale over the foremost place of business of the exporter (however Rule 96A(1) requires to be recorded with the Jurisdictional Commissioner)
5. In the Bond, the exporter embraces that he might send out the merchandise/benefits and watch every one of the arrangements of the Act/Rules in regard of fare of products/administrations.
6. A Bank Guarantee should be outfitted to the Commissioner as a security under the Bond. The Jurisdictional Commissioner may choose about the measure of Bank Guarantee contingent on the reputation of the exporter. On the off chance that Commissioner is happy with the reputation of an exporter at that point outfitting of bond without bank assurance would suffice. Regardless the bank certification ought to regularly not surpass 15% of the bond sum.
7. The Bonds likewise will express that in case of break or disappointment in execution, the Government might summon the bank assurance to make great all the misfortune/harms.
8. The Bond must be outfitted before the fare. Once the Bond is outfitted, the exporter can complete the fare of products/administrations
9. No assessment will be paid on the fare supply and the receipt might convey a statement as 'SUPPLY MEANT FOR EXPORT UNDER BOND OR LETTER OF UNDERTAKING WITHOUT PAYMENT OF INTEGRATED TAX'
10. The arrangement of Form GST RFD-11 alongside organization of the Bond to be executed is accessible in Circular No 26/2017 – Customs dated July 1, 2017
11. By and by, the module for outfitting of GST FORM RFD-11 is not accessible on the GST basic entry. Subsequently, the Form GST RFD-11 must be downloaded from cbec.gov.in and outfitted physically to the jurisdictional Deputy/Assistant Commissioner.
12. Frame ARE-1, which from the start was a critical statutory report to profit send out advantages, both under Excise and Customs Laws, is presently administered off with the onset of GST, aside from that it will now apply just to products to which arrangements of Central Excise Ac t keep on being appropriate.
Choice 2 – Supply under a Letter of Undertaking (LUT)
1. Choice 1 i.e. outfitting of Bond upheld by a Bank Guarantee brings about obstructing of working capital since Bank would approach the sent out for an edge cash store against the Guarantee.
2. Therefore, every sent out would need to practice Option 2 i.e. trade again LUT in lieu of a Bond.
3. Be that as it may, the Government is specific in giving this alternative and at introduce, the accompanying enrolled individual might alone be qualified for accommodation of LUT set up of a Bond (Refer CBEC Notification No 16/2017 – Central Tax dated July 7, 2017)
a status holder as determined in section 5 of the Foreign Trade Policy 2015-2020; or
who has gotten the due outside internal settlements adding up to at least 10% of the fare turnover, which ought not be not as much as Rs 1 Crore, in the former monetary year, and he has not been indicted for any offense under the CGST Act, 2017 or under any of the current laws on the off chance that where the measure of assessment avoided surpasses Rs 2.5 lakhs.
4. A Letter of Undertaking in Form GST RFD-11, routed to the President of India must be executed by the Registered Person. As a move arrangement, fares might be permitted under existing LUT's till July 31, 2017, by which date, the previously mentioned Form GST RFD-11 must be outfitted for future fares.
5. As a simplicity of consistence, the LUT should be acknowledged by the jurisdictional Deputy/Assistant Commissioner having locale over the key place of business of the exporter (however Rule 96A(1) requires to be recorded with the Jurisdictional Commissioner)
6. In the LUT, the exporter would embrace the accompanying: (a) To send out products inside 3 months from receipt date (b) To get thought for fare of administrations in remote cash inside 1 year from receipt date (c) To watch every one of the arrangements of the Act/Rules in regard of fare (d) In occasion of inability to do the fare he might pay IGST alongside premium @ 18% on the IGST from the receipt date till date of installment
7. The LUT must be outfitted before the fare. Once the LUT is outfitted, the exporter can do the fare of merchandise/administrations
8. No duty will be paid on the fare supply and the receipt should convey an affirmation as 'SUPPLY MEANT FOR EXPORT UNDER BOND OR LETTER OF UNDERTAKING WITHOUT PAYMENT OF INTEGRATED TAX'
9. The LUT will be legitimate for 12 months and ought to be outfitted for each monetary year in copy.
10. No Bank Guarantee is required to be outfitted to the Commissioner. In any case, if the exporter neglects to agree to the states of the LUT, he might be made a request to outfit a Bond.
11. The organization of Form GST RFD-11 alongside arrangement of the LUT to be executed is accessible in Circular No 26/2017 – Customs dated July 1, 2017
12. Directly, the module for outfitting of GST FORM RFD-11 is not accessible on the GST basic entrance. Subsequently, the Form GST RFD-11 must be downloaded from cbec.gov.in and outfitted physically to the jurisdictional Deputy/Assistant Commissioner.
13. Frame ARE-1, which from the start was an imperative statutory report to profit send out advantages, both under Excise and Customs Laws, is currently administered off with the onset of GST, aside from that it will now apply just to items to which arrangements of Central Excise Ac t keep on being material.
Choice 3 – Payment of IGST and claim discount of such duty paid on trade supply
1. The exporter readies a receipt demonstrating the measure of IGST payable on the estimation of fares
2. The receipt might state "SUPPLY MEANT FOR EXPORT ON PAYMENT OF INTEGRATED TAX"
3. The IGST obligation appeared on the receipt is just for introduction reason and not required to be gathered from the client
4. The exporter utilizes the adjust benefited in his ITC records to release the IGST obligation appeared on the fare receipt. There is no money surge as the IGST risk is released by use of accessible ITC.
5. The IGST obligation, in this way released, is then asserted as discount.
[Disclaimer: This Article is set up on July 8, 2017 and outlines the legitimate position under the accompanying:
1. The Integrated Goods and Service Tax Act, 2017
2. The Central Goods and Service Tax Act, 2017
3. The Central Goods and Services Tax Rules, 2017
4. Roundabout – Customs – 26/2017 dt July 1, 2017 – Exports Procedures and Self-fixing of holders
5. Roundabout – CBEC – 2-2-2017 dt July 4, 2017 – Issues identified with outfitting of Bond and LUT for Exports
6. Roundabout – CBEC – 4-4-2017 dt July 7, 2017 – Issues identifying with Bond/LUT for trades without installment of IGST
7. Notice – CBEC – 16/2017 Central Tax dt July 7, 2017 – Conditions for accommodation of LUT set up of bond]
Sec 16 of IGST Act, 2017: Zero rated supply
The below post explains about Zero rated supply under section 16 of IGST Act,2017.
Section 16 of IGST Act, 2017 explains Zero rated supply as below: (The amendments if any will also be updated here soon).
The extract of Section 16 of IGST Act,2017 quoted below:
16 Zero rated supply.
16. (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.
(2) Subject to the provisions of sub-section (5) of section 17 of the Central Goods
and Services Tax Act, credit of input tax may be availed for making zero-rated supplies,
notwithstanding that such supply may be an exempt supply.
(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 unutilised 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 Services Tax Act
or the rules made thereunder.
Choices to the exporters:
Choice 1 – Supply under a Bond
1. A Bond (in nature of Indemnity bond) in Form GST RFD-11 is executed on non-legal stamp paper between the exporter and the Government through President of India. As a move arrangement, fares might be permitted under existing Bonds till July 31, 2017, by which date, the previously mentioned Form GST RFD-11 must be outfitted for future fares.
2. The Bond require not be given independently for each fare as this would make the consistence troublesome. The Bond would resemble a running Bond (with charge/credit office)
3. The Bond ought to adequately cover the measure of duty required in the fare in light of evaluated impose obligation as surveyed by the exporter himself. The exporter might guarantee that the extraordinary assessment obligation on sends out is inside the bond sum. On the off chance that the bond sum is lacking to cover the expense risk in yet to be finished fares, the exporter should outfit a crisp attach to cover such obligation.
4. As a simplicity of consistence, the Bond might be acknowledged by the jurisdictional Deputy/Assistant Commissioner having locale over the foremost place of business of the exporter (however Rule 96A(1) requires to be recorded with the Jurisdictional Commissioner)
5. In the Bond, the exporter embraces that he might send out the merchandise/benefits and watch every one of the arrangements of the Act/Rules in regard of fare of products/administrations.
6. A Bank Guarantee should be outfitted to the Commissioner as a security under the Bond. The Jurisdictional Commissioner may choose about the measure of Bank Guarantee contingent on the reputation of the exporter. On the off chance that Commissioner is happy with the reputation of an exporter at that point outfitting of bond without bank assurance would suffice. Regardless the bank certification ought to regularly not surpass 15% of the bond sum.
7. The Bonds likewise will express that in case of break or disappointment in execution, the Government might summon the bank assurance to make great all the misfortune/harms.
8. The Bond must be outfitted before the fare. Once the Bond is outfitted, the exporter can complete the fare of products/administrations
9. No assessment will be paid on the fare supply and the receipt might convey a statement as 'SUPPLY MEANT FOR EXPORT UNDER BOND OR LETTER OF UNDERTAKING WITHOUT PAYMENT OF INTEGRATED TAX'
10. The arrangement of Form GST RFD-11 alongside organization of the Bond to be executed is accessible in Circular No 26/2017 – Customs dated July 1, 2017
11. By and by, the module for outfitting of GST FORM RFD-11 is not accessible on the GST basic entry. Subsequently, the Form GST RFD-11 must be downloaded from cbec.gov.in and outfitted physically to the jurisdictional Deputy/Assistant Commissioner.
12. Frame ARE-1, which from the start was a critical statutory report to profit send out advantages, both under Excise and Customs Laws, is presently administered off with the onset of GST, aside from that it will now apply just to products to which arrangements of Central Excise Ac t keep on being appropriate.
Choice 2 – Supply under a Letter of Undertaking (LUT)
1. Choice 1 i.e. outfitting of Bond upheld by a Bank Guarantee brings about obstructing of working capital since Bank would approach the sent out for an edge cash store against the Guarantee.
2. Therefore, every sent out would need to practice Option 2 i.e. trade again LUT in lieu of a Bond.
3. Be that as it may, the Government is specific in giving this alternative and at introduce, the accompanying enrolled individual might alone be qualified for accommodation of LUT set up of a Bond (Refer CBEC Notification No 16/2017 – Central Tax dated July 7, 2017)
a status holder as determined in section 5 of the Foreign Trade Policy 2015-2020; or
who has gotten the due outside internal settlements adding up to at least 10% of the fare turnover, which ought not be not as much as Rs 1 Crore, in the former monetary year, and he has not been indicted for any offense under the CGST Act, 2017 or under any of the current laws on the off chance that where the measure of assessment avoided surpasses Rs 2.5 lakhs.
4. A Letter of Undertaking in Form GST RFD-11, routed to the President of India must be executed by the Registered Person. As a move arrangement, fares might be permitted under existing LUT's till July 31, 2017, by which date, the previously mentioned Form GST RFD-11 must be outfitted for future fares.
5. As a simplicity of consistence, the LUT should be acknowledged by the jurisdictional Deputy/Assistant Commissioner having locale over the key place of business of the exporter (however Rule 96A(1) requires to be recorded with the Jurisdictional Commissioner)
6. In the LUT, the exporter would embrace the accompanying: (a) To send out products inside 3 months from receipt date (b) To get thought for fare of administrations in remote cash inside 1 year from receipt date (c) To watch every one of the arrangements of the Act/Rules in regard of fare (d) In occasion of inability to do the fare he might pay IGST alongside premium @ 18% on the IGST from the receipt date till date of installment
7. The LUT must be outfitted before the fare. Once the LUT is outfitted, the exporter can do the fare of merchandise/administrations
8. No duty will be paid on the fare supply and the receipt should convey an affirmation as 'SUPPLY MEANT FOR EXPORT UNDER BOND OR LETTER OF UNDERTAKING WITHOUT PAYMENT OF INTEGRATED TAX'
9. The LUT will be legitimate for 12 months and ought to be outfitted for each monetary year in copy.
10. No Bank Guarantee is required to be outfitted to the Commissioner. In any case, if the exporter neglects to agree to the states of the LUT, he might be made a request to outfit a Bond.
11. The organization of Form GST RFD-11 alongside arrangement of the LUT to be executed is accessible in Circular No 26/2017 – Customs dated July 1, 2017
12. Directly, the module for outfitting of GST FORM RFD-11 is not accessible on the GST basic entrance. Subsequently, the Form GST RFD-11 must be downloaded from cbec.gov.in and outfitted physically to the jurisdictional Deputy/Assistant Commissioner.
13. Frame ARE-1, which from the start was an imperative statutory report to profit send out advantages, both under Excise and Customs Laws, is currently administered off with the onset of GST, aside from that it will now apply just to items to which arrangements of Central Excise Ac t keep on being material.
Choice 3 – Payment of IGST and claim discount of such duty paid on trade supply
1. The exporter readies a receipt demonstrating the measure of IGST payable on the estimation of fares
2. The receipt might state "SUPPLY MEANT FOR EXPORT ON PAYMENT OF INTEGRATED TAX"
3. The IGST obligation appeared on the receipt is just for introduction reason and not required to be gathered from the client
4. The exporter utilizes the adjust benefited in his ITC records to release the IGST obligation appeared on the fare receipt. There is no money surge as the IGST risk is released by use of accessible ITC.
5. The IGST obligation, in this way released, is then asserted as discount.
[Disclaimer: This Article is set up on July 8, 2017 and outlines the legitimate position under the accompanying:
1. The Integrated Goods and Service Tax Act, 2017
2. The Central Goods and Service Tax Act, 2017
3. The Central Goods and Services Tax Rules, 2017
4. Roundabout – Customs – 26/2017 dt July 1, 2017 – Exports Procedures and Self-fixing of holders
5. Roundabout – CBEC – 2-2-2017 dt July 4, 2017 – Issues identified with outfitting of Bond and LUT for Exports
6. Roundabout – CBEC – 4-4-2017 dt July 7, 2017 – Issues identifying with Bond/LUT for trades without installment of IGST
7. Notice – CBEC – 16/2017 Central Tax dt July 7, 2017 – Conditions for accommodation of LUT set up of bond]
Exporters under GST, Zero Rated Exports under GST; Form RFD-11; All you need to know about Refund and IGST
Reviewed by Author
on
July 16, 2017
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Reviewed by Author
on
July 16, 2017
Rating:
