Export of sample is zero-rated in accordance with Section 16 of IGST Act

'AD Cat I banks may close BoE for import deals where write-off is for quality issues'

We imported certain goods that are not as per specifications. So, we do not intend to pay against the imports. We want to know the FEMA guidelines for “write-off” of bill of entry (BoE).

As per RBI Master Direction No. 17/2016-17 dated January 1, 2016, “AD Category I banks may close the BoE for such import transactions where write off is on account of quality issues; short shipment or destruction of goods by the port/Customs/health authorities in terms of extant guidelines on the matter subject to submission of satisfactory documentation by the importer irrespective of the amount involved. AD Bank shall settle and close ORM/BoE with appropriate ‘Adjustment Indicator’ in IDPMS”. So, you may approach your bank with relevant details and appropriate documentation. 

 We want to send free samples to an overseas buyer for procurement of export orders. What is the treatment under GST law? Please give the relevant provision. 

The export of sample is also zero-rated in accordance with Section 16 of the IGST Act, 2017 read with Rule 96 or Rule 89 of the CGST Rules, 2017, depending on whether you export paying IGST under refund claim or export without IGST payment under LUT.  

We have received payment towards design and development charges from a foreign buyer. Can we treat it as export of services under GST?

“Export of service” is defined under Section 2 (6) of IGST Act, 2017.  If all the criteria mentioned there are met, you can treat it as export of service. 

We have exported goods covered under HS Code 6114909 and 61069090 and filed our MEIS claim. The authorities have rejected our claim on the grounds that the description does not match. What is the remedy?

As per DGFT Public Notice no. 62 dated February 16, 2018, except for the ITC (HS) Codes specified in the Annexure to that Public Notice, for all other notified ITC (HS) Codes in Table 2 of Appendix 3B of HBP, Regional Authority (RA) shall process applications for MEIS claim only on the basis of ITC (HS) Code as specified in the Shipping Bill. In respect of the ITC (HS) Codes specified in Annexure to that  Public notice, RA shall continue to process applications for MEIS claim after matching the description as well in the Shipping Bill with Export Product Description in Table 2 of Appendix 3B. That annexure was amended through Public Notice no. 68/2018 dated January 9, 2019. I do not find HS codes mentioned by you in that Annexure. So, you may approach the RA on the basis of the said Public Notices.

Is there a time limit after imports, for shifting capital goods imported under the EPCG scheme from one unit to another?

You can shift capital goods during the entire export obligation period to other units mentioned in your IEC and RCMC, subject to production of fresh installation certificate to the RA concerned within six months of the shifting.

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