Export of Goods and Services occur from India to other countries against monetary consideration.
Export means taking goods or services from India to another country against some monetary consideration.
As per section 2 (18) of Customs Act, 1962, “Export of goods “means taking goods out of India to a place outside India.
As per IGST Act Section 2(6) “Export of services” means the supply of any service when –
1. The supplier of service is located in India;
2. The recipient of service is located outside India;
3. The place of supply of service is outside India;
4. The payment for such service has been received by the supplier of service in convertible foreign exchange;
5. The supplier of service and the recipient of service are not merely establishments of a distinct person by Explanation 1 in Section 8 of IGST Act, 2017.
1. Where the place of supply of service is within India but to a person located outside India.
2. Where the consideration for the supply of services is received in Indian currency or in such a currency other than convertible currency.
3. Where services are supplied to the foreign branch
Under the GST regime, export of goods or services has been treated as:
1. Inter-State supply – Export is treated as Inter-state supply under GST and IGST is charged on export.
2. Zero rated supply – Exports are treated as Zero Rated supplies i.e. there is no tax or duty imposed on the export of goods or services either at the input stage or at the final product stage.
According to Sec.16 (1) IGST ACT,Zero rated supply means any of the following supplies of goods or services or both, namely –
(a) Export of goods or services or both; or
(b) Supply of goods or services or both to a Special Economic Zone developer or a Special Economic Zone unit.
Any exporter making zero rated supplies shall be eligible to claim refund under the following options –
1. In case of supply of goods or/ and services under bond or Letter of Undertaking in GST RFD 11, without payment of integrated tax, refund of unutilized input tax credit can be claimed.
For this, the exporter can file a refund application in RFD-01 on the GST portal.
2. Any exporter or United Nations or Embassy or other agencies/bodies who supplies goods or/ and services,and pays the IGST, can claim refund of such tax paid on the supplied goods or/ and services.
For this, the shipping bill filed by the exporter will be considered as the application for refund.
As per the Section 54(8) of the CGST Act, Refunds may arise under the following situations:
· Export of goods without paying IGST (accumulated input tax credit)
· Export of goods with payment of IGST, Rule 96 applicable
· Export of services with or without paying IGST, Rule 89 applicable for both situations
· Goods or services supplied to SEZ unit or SEZ developer
· Deemed exports
· Tax deposits under wrong head
· ITC accumulated because of the inverted tax structure
· Assessment or provisional assessment or appeal or any other order
· Tax paid in advance and then refunded due to partial supply or non-supply
According to the provisions of GST Law, refunds are to be granted to the dealer electronically, based on the application in RFD-01 on the GST portal in all the cases mentioned above ( with exception of exports of goods with the payment of IGST).
Rule 96 of the CGST Rules governs the refund of IGST that is paid on the goods exported out of India. The rule states that the shipping bill that is filed by the exporter will be considered as the application for refund. Also, this application will be deemed to have been filed only when –
· The person in charge of the conveyance carrying the export goods duly files an export manifest or an export report covering the number and the date of shipping bills or bills of export;
· GSTR-3B for the month has been filed
· Details of exports have been furnished in Table 6A of GSTR-1
90% of the IGST paid on the exports would be granted within 7 days and the balance within 60 days.
Deemed exports refer to those transactions where supplies of goods do not leave India, and payment for such supplies is received either in Indian rupees or in convertible foreign exchange, provided that goods are manufactured or produced in India.. It must be noted that deemed export is applicable only in case of supplies of goods; however, the same is not applicable in case of supplies of services.
The Government has listed the following types of supply to be categorised as deemed exports:
· Supply of goods by a registered person against Advance Authorization
· Supply of capital goods by a registered person against Export Promotion Capital Goods Authorization
· Supply of goods by a registered person to Export Oriented Unit
· Supply of gold by a bank or Public Sector Undertaking specified in the notification No. 50/2017-Customs, dated the 30th June, 2017 (as amended) against Advance Authorization.