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EXPORT (INCLUDING DEEMED EXPORT) OF GOODS / SERVICES UNDER CLAIM OF REBATE OR REFUND OF ACCUMULATED CREDIT OF TAX WHEN GOODS/SERVICES ARE EXPORTED

Para 2 (B) - Draft-Bills-Reports - Business Processes for GST on Refund Process - Goods and Services Tax - Para 2 (B) - 2 (B) : The treatment for export of goods and services and that of deemed export would be different under GST regime because of their inherent nature. Therefore these are being discussed separately as follows: EXPORT OF GOODS: i) Presently under the Central Law, every exporter has three options available for neutralization of taxes paid on inputs used for export goods or taxes .....

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on exported goods. ii) It was noted that in the proposed GST regime, exports are proposed to be Zero rated which means that the export goods would not suffer any actual tax liability although the inputs for them would be tax paid which would be subsequently neutralized. So there should be a mechanism whereby the GST paid on the inputs or on exported finished goods, either through cash or by utilization of input tax credit, is refunded to the exporter. This would serve two objectives simultaneou .....

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is reduced to the minimum. iii) It is recommended that the first option mentioned above i.e. option to procure duty free inputs for exported goods should not be available in the GST regime. This would obviate the requirement of submission of statutory form and the supplier of goods to the actual exporter would be required to pay the GST and will not be required to comply with various formalities presently required for making tax free supplies. iv) It is further recommended that other two option .....

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is proposed for making this system as simple as possible: a) The IEC details of taxpayer will be captured at the time of issuance of GSTIN and the same can be verified online with DGFT for verifying the correctness of the exporter s particulars. b) The refund of ITC / rebate of GST paid on exported goods may be granted on submission of application to this effect by the taxpayer. c) Since the trigger point for refund is export of goods, therefore the event of export needs to be verified (mostly .....

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ale/purchase details by the taxpayers along with the monthly returns. These details can be linked with the Customs data (for export cases) available with ICEGATE. f) Normally for export verification the following documents are sought from the applicant: i) Shipping Bill (Export Promotion copy); ii) Mate s Receipt/Transporter s Challan (in case of export by road); iii) Export invoice; iv) Packing list; v) Bill of Lading/ Airway Bill; vi) Bank Realization Certificate (BRC). g) Since it is proposed .....

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as per the RBI guidelines, the exporter has a time period of one year from the date of export, within which the export proceeds are required to be remitted into India. Thus BRC will not be available till the time export proceeds are realized. Therefore it is recommended that submission of BRC may not be insisted upon at the time of filing of refund application and post facto verification can be carried out by the tax authorities. The refund in such cases should be subject to submission of BRC de .....

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elf if the payment has already been received in advance. It is also recommended that e-BRC module may be integrated in the Refund process under GST. i) The time limit for filing of refund application is normally linked with the date of export and it is proposed that this time limit should be fixed at one year from the date of export. This date is the date on which the proper officer under the Customs Act gives an order for export of goods commonly known as Let Export Order (LEO). This date can a .....

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quired to be filed along with the monthly return) and there is no need for separate submission of these documents. Once the GST paid character of exported goods is established, refund can be sanctioned. k) In respect of refund claimed for GST paid on inputs (including input services) used for exported goods, once the export is established, verification of the GST paid on the inputs (including input services) as well as their utilization for the exports is required to be carried out. For this nor .....

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und of input tax credit on inputs (including input services) can be sanctioned once the input tax credit has been matched from the purchase and sale statements filed by the exporter and supplier respectively and there is no need for separate submission of these documents. As regards utilization of the inputs for exports, a simple formula can be adopted that will provide for proportionate credit based on export turnover divided by total turnover. Moreover, a declaration can be obtained from the e .....

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tion of the refund of GST paid on inputs (input services)/rebate of GST paid on exported services. ii) It is further noted that the invoice and BRC are the crucial documents for filing of the refund application. Therefore the relevant date, in case of export of services, will be the date of invoice or the date of BRC, whichever is later. This will take care of the situation if the payment has already been received in advance. It is also recommended that e-BRC module may be integrated in the refu .....

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/World Bank Funded Projects can seek refund of terminal excise duty as also drawback of the duty paid on the inputs used in manufacture of such goods. However such refund is not permissible for VAT paid on such domestically supplied goods. ii) It is recommended that the deemed export need to be treated on equal footing as export and the similar provision as detailed above for actual exports of goods or services would be applicable except the following: a) The supplier of final goods, in the cour .....

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mount below which self-certification (instead of CA Certificate) would be sufficient. c) The recipient unit would be eligible for refund of IGST, if it has actually paid IGST at the time of obtaining goods / services from the domestic supplier. In no case, both the supplier and the recipient unit can obtain refund at the same time in respect of the same transaction. A suitable validation to block such double claim should be built in the GSTN /refund processing backend system. d) Such recipients .....

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