'GST laws vague on export of exempted goods through third party'

Q. We were exporting goods of value up to Rs 25,000 without furnishing any declaration or GR waiver. Our new bankers say that we must take GR waiver for such shipments. What is the correct position?

 

The exemption from furnishing declaration regarding realisation of export proceeds for exports up to Rs 25,000 value existed in the Foreign Exchange Management (Export of Goods and Services) Regulations, 2000. The current Foreign Exchange Management (Export of Goods and Services) Regulations, 2015 does not have such an exemption. (Please see this link).

 

 

Q. We manufacture exempted and taxable products. So, we take input tax credit (ITC) of GST paid on all inputs and inputs services. Exports of our taxable as well as exempted products are zero-rated and section 16(2) of IGST Act, 2017 allows us to take ITC against zero-rated exports also. When we export in our own name, the GST paid on inputs and input services used for making zero-rated exports, including exports of exempted products, are also attributed to the purposes of effecting taxable supplies in the manner prescribed under the Rules 42 and 43 of the CGST Rules, 2017. Now, we have received an order for export of exempted products from a merchant exporter. Can we supply at 0.1 per cent GST under notification 41/2017-IT (Rate) dated October 23, 2017? If not, how to prove that we have made zero-rated supplies of the exempted products and how to claim refund of unutilised ITC?

 

Notification 41/2017-IT (Rate) applies to taxable goods and therefore, you cannot use it for supply of exempted products to the merchant exporter. The supplies you make to a merchant exporter are not zero-rated and therefore, the normal provisions for refund of unutilised input tax credit against export without payment of GST under letter of undertaking do not come into play. The present dispensations are not clear on how to deal with this situation and claim refund of the unutilised ITC. You can write to the Central Board of Indirect Taxes and Customs (CBIC) and ask for suitable provisions to be made in the laws.

 

Q. We have imported some goods and deposited them in the bonded warehouse by filing the bill of entry for warehousing. Now, Section 61(2) of the Customs Act, 1962, says that if warehoused goods remain in a warehouse beyond a period of 90 days, interest is payable on the amount of duty payable at the time of clearance of the goods on the warehoused goods, for the period from the expiry of 90 days until the date of payment of duty on the warehoused goods. When will the 90-day period commence -- the in-bond bill of entry date, or the date when the goods are deposited in the bonded warehouse?

 

The 90-day period will commence from the date of deposit of the goods in the bonded warehouse. Please refer to CBEC Circular 39/2013-Cus dated October 1, 2013.

 

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