We are a 100 per cent EOU unit. We want to send rejected raw material/ capital goods to the supplier. What will be the duty/tax (BCD, ADD, CVD, GST, etc) impact on the said transaction?
As per Para 6.15 (a) (iii) of FTP, in case an EOU/EHTP/STP/ BTP unit is unable to utilise goods and services, imported or procured from DTA, it may be exported. Also, as per condition no. 4(i) of the notification 52/2003-Cus dated March 31, 2003, the proper officer may, subject to such conditions and limitations as may be imposed by him and subject to provisions of the Foreign Trade Policy, permit re-export. So, there are no duty or tax implications for re-export of the goods imported without duty payment under the notification 52/2003-Cus dated March 31, 2003.
As a sale and marketing consultant, I fetch orders for a merchant exporter, who sources the product under 0.1 per cent GST from local manufacturers and exports the goods with zero GST under LUT. I bill my services at 15 per cent of sales value in rupees to the merchant exporter and charge GST. The merchant exporter is unable to get refund of that (since it is a service and not goods). Please advise how the merchant exporter can get refund of GST paid to me.
The merchant exporter can take credit of the GST that you charge and claim a refund of the same under Rule 89 (4B) of the CGST Rules, 2017. It says that where the person claiming refund of unutilised input tax credit on account of zero-rated supplies without payment of tax has received supplies on which the supplier has availed the benefit of the notification No. 40/2017-Central Tax (Rate), dated the October 23, 2017, or notification No. 41/2017-Integrated Tax (Rate), dated the October 23, 2017, the refund of input tax credit, availed in respect of inputs received under the said notifications for export of goods and the input tax credit availed in respect of other inputs or input services to the extent used in making such export of goods, shall be granted. If the department contends that the service is not used in making export of goods, he can still claim refund under Rule 89(4) of the CGST Rules, 2017.
As an EOU, we have exported on IGST payment under refund claim from July 2018 onwards, but our claims are held up because our GST consultant has shown the tax amount in col. 3.1(a) instead of 3.1(b) in GSTR-3B. Our GST officers say that they cannot resolve this matter. Please advise how we can resolve this issue or whom we can approach.
For refund, the shipping details are matched with the details furnished in Table 6 of GSTR-1 and not GSTR-3B. Also, on September 4, 2018, the Rule 96 (10) of CGST Rules, 2017 was amended retrospectively, denying refund of IGST paid on exports to EOUs that have taken the benefit of notification 78/2017-Cus dated October 23, 2017. You may accordingly re-examine your eligibility for refund.