We have received an order for export to Bhutan against payment in Indian rupees. Can we accept this order and export under LUT?
Yes. Regulation 3(1)(A)(ii) of the Foreign Exchange Management (Manner of Receipt and Payment) Regulations, 2016 allows you to receive payment for exports to Bhutan in Indian rupees. CBEC Circular no. 88/07/2-019-GST dated February 1, 2019, clarifies that the acceptance of LUT for supplies of goods or services to countries outside India will be permissible irrespective of whether the payments are made in Indian currency or convertible foreign exchange, as long as they are in accordance with the applicable RBI guidelines.
Can we make payments to a local supplier from our EEFC account? If so, can you cite the authority?
Para 3 (v) of the Schedule to the Foreign Exchange Management (Foreign Currency Accounts by a Person Resident in India) Regulations, 2000, says: “Following debits may be made to an EEFC Account, namely — (v) Payment in foreign exchange to a person resident in India for supply of goods/ services including payments for air fare and hotel expenditure.”
We got an advance authorisation in 2012-13, against which import was done for 100 per cent eligible amount, but export obligation could not be met completely. To redeem the licence we had to pay customs duty on the extent of deficit of export obligation. Customs duty paid includes CVD and SAD, whose input credit was available in the pre-GST regime. As per Section 142 of the CGST Act, 2017, a claim which is initiated under the existing law (pre-GST) will be refunded in cash. How can we get a refund of the amount paid?
Section 142(3) of the CGST Act, 2017 says, “every claim for refund filed by any person before, on or after the appointed day, for refund of any amount of CENVAT credit, duty, tax, interest or any other amount paid under the existing law, shall be disposed of in accordance with the provisions of existing law and any amount eventually accruing to him shall be paid in cash, notwithstanding anything to the contrary contained under the provisions of existing law other than the provisions of sub-section (2) of section 11B of the Central Excise Act, 1944 (1 of 1944)”.
So, please file an application in the prescribed Form R, along with a copy of the challan evidencing payment of duty and a certificate from Customs regarding the duty payment towards regularisation of default under advance authorisation, and a covering letter explaining the circumstances leading to the refund claim.
We have received summons from the Customs asking us to submit evidence like copies of shipping bills, invoice, and packing list against purging of shipping bills. What are the implications?
I do not know why you filed shipping bills and then decided not to export, allowing the system to purge the shipping bills. If you are able to satisfy the Customs that you had valid reasons to do so, there may be no adverse implications.
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