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Six FAQ’s related to imports and exports under GST
Hemlata Khandelwal / 2021-03-19 07:15:11

  1. How will imports be taxed under GST?

All imports will be treated as inter-state supplies for the purposes of GST. IGST is payable on imports, among other duties of customs. The full set-off will be available as an ITC of IGST paid on imports on goods and services.

  1. How will exports be treated under GST?

All exports will be treated as inter-state supplies. Exports of zero-rated supply of goods and services will be considered. The exporter has the option to either export under Bond / Letter of Undertaking without payment of tax and pays IGST by paying ITC or IGST or using cash at the time of claim refund of IGST on export.

  1. How can IGST be paid?

IGST can be paid up to the available cash and balance using ITC. For payment of IGST, ITC will be used in the following order:

  • The ITC of IGST will be used for payment of the first IGST;
  • After the ITC of IGST expires, the ITC of CGST will be used;
  • If the ITC of both IGST and CGST expires, the ITC of SGST will be used.
  • The remaining IGST liability will be paid in cash. The GST system for payment of IGST will ensure the maintenance of this hierarchy using credit.
  • However, IGST is to be paid in cash only on imports.
  1. Tell us about the provisions which are for the refund of taxes for exporters in GST?

The provisions relating to refunds are contained in section 54 of the CGST Act, 2017. It provides for a zero-rated supply of goods or services or such zero-rated supply or a refund of tax paid on inputs or input services used in making a refund. Tax on the supply of goods considered as deemed exports, or refund without any input tax credit. Identification provisions exist under the IGST Act, 2017 and the relevant SGST / UTGST Acts.

Please note that GST registration online is required to do import or export business and to avail of the benefits of GST.

  1. Can unused input tax credit be allowed as a refund to exporters?

Yes. Section 54 (3) of the CGST Act, 2017 provides for the refund of any unused input tax credit of inputs and input services at the end of any tax period, except where

  • Goods exported from India are subjected to export duty; or
  • The exporter claims a refund of CGST or IGST paid on such exports.                                                                                   
  1.  Describe the procedure of refund claiming by exporters?

Refunds can be claimed by filing an application form electronically in the prescribed form with the required documents through the Common Portal notified by the Commissionerate, or directly through the Facilitation Center notified by the Commissioner. The refund amount will be electronically deposited in any bank account of the applicant which is mentioned in his registration details and specified in the application for refund. For details of CGST Rules, 2017 related to refunds 2017 can be referred.

In case of a refund of IGST, the shipping bill filed with the Customs is treated as an application for a refund if the exporter filed a valid return in Form GSTR-3 / 3B and in charge of the person carrying the goods. Done Export has submitted an export disclosure/report. On receipt of information from the general portal about the exporter submitting a valid return to FORM GSTR-3 or FORM GSTR-3B, the customs officer at the port of export will process an amount equal to the claim for refund and the unified tax. In respect of each shipping, the bill will be deposited electronically in the bank account of the exporter.

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