Chatroom: Clarity needed on Rodtep scheme extension for EOU/SEZ/AA exports

We had supplied our manufactured goods to a merchant exporter on payment of 0.1 per cent IGST under the notification 41/2017-IT(Rate) dated 13th October 2017. Within 90 days of the supply, the merchant exporter had customs clear the goods and obtained the ‘let export order’. He had also delivered the goods to the shipping line and obtained the ‘on board’ bill of lading dated before expiry of 90 days from the date of supply. However, the shipping line filed the EGM after 90 days. Now, the audit team demands full IGST from us on the grounds that the goods were not exported within 90 days from the date of supply. We seek your guidance on how to deal with such a patently unreasonable demand.

 

I think the auditors are relying on Section 2(5) of the IGST Act, 2017 which says that ‘export of goods’ with its grammatical variations and cognate expressions, means taking goods out of India to a place outside India. Also, they are demanding the full IGST from you on the basis of Para 2 of the said notification 41/2017 which says that the   registered   supplier   shall   not   be   eligible   for   the   above   mentioned exemption if the registered recipient fails to export the said goods within a period of ninety days from the date of issue of tax invoice. In my opinion, you may take a plea that date of exports is not defined in the GST laws and that as per Para 11.12 (i)(b) of HBP, for containerised cargo, the date of shipment/export is the date of ‘on board bill of lading’. The GST department may not accept such a plea but it is likely that the Courts will give you suitable relief as the goods have, in fact, been exported and not filing EGM in time is not the fault of the exporter.

 

We refer to your article titled ‘unnecessary confusion on continuation of Rodtep scheme for exporters’ (Business Standard – 13th January 2025). The ICEGATE is now carrying a message stating ‘Rodtep Scheme for SEZ/EoU/AA exports has been extended until 29.01.2025 as an interim measure to facilitate trade’. We find no notification of such extension. Can you please clarify the correct position?

 

The correct position is that till now the scheme is not extended for SEZ/EoU/AA exports beyond 31.12.2024. My guess is that the ICEGATE message is to enable you to opt for the scheme while filing the shipping bill. It is possible that clarity will emerge on extension of the scheme for such exporters in the next few days.

 

We refer to the Notification No. FEMA 10(R)(5)/2025-RB dated January 14, 2025.  Can you explain how it helps exporters?

 

That notification now allows exporters to open foreign currency accounts outside India to receive export proceeds and utilise the funds for making payments for imports. Thus, the banking costs in making inward and outward remittances can be saved. More details on other procedural aspects such as how to generate e-BRC are awaited.