1. BY CA RITESH R. MEHTA B. COM, FCA, DISA Mobile No - 9822472744
EXPORT UNDER GST
BY CA RITESH R. MEHTA
B. COM, FCA, DISA
Mobile No

2. BACKGROUND OF TAXATION
GST is a destination based tax on consumption of goods or services. It is also the policy of the Government of India to export the goods and/or services not the taxes out of India. This makes the exports cheaper and thus Indian products or services will be more competitive in the international markets.
BACKGROUND OF
TAXATION
By CA Ritesh Mehta

3. DEFINITION
By CA Ritesh Mehta

4. INDIA
Means
The territory of the Union as referred to in clauses (2) and (3) of Article 1 of the Constitution;
its territorial waters, continental shelf, exclusive economic zone or any other maritime zone as defined in the Territorial Waters, Continental Shelf, Exclusive Economic Zone and other Maritime Zones Act, 1976 (80 of 1976);
the seabed and the subsoil underlying the territorial waters;
the air space above its territory and territorial waters; and
the installations, structures and vessels located in the continental shelf of India and the exclusive economic zone of India, for the purposes of prospecting or extraction or production of mineral oil and natural gas and supply thereof;
DETAILED ANALYSIS
Supply made to Jammu & Kashmir cannot be called as export of goods /services as Jammu & Kashmir is a part of India.
India includes SEZ, EOU, FTZ etc
By CA Ritesh Mehta

5. DETAILED ANALYSIS OF INDIA
Installations, structures and vessels located in the continental shelf of India and the EEZ
For the purposes of prospecting or extraction or production of mineral oil and natural gas and supply thereof
India
For other purpose
Not India
DETAILED ANALYSIS OF INDIA
By CA Ritesh Mehta

6. EXPORT OF GOODS
Means taking goods out of India to a place outside India.
DETAILED ANALYSIS
Similar to the definition of Export as defined under Customs Act.
In case of Export of Service, it is prerequisite that payment against services rendered must be in convertible foreign exchange but at the same time such condition do not exist in case of export of Goods.
Realization of Foreign Exchange
Governed by
Consequences of Non Compliance
Time Limit
Export of Goods
FEMA Act
Pay Penalty
No Tax
Within 6 months
Export of Services
GST Act
Pay Tax
No Penalty
No time limit
By CA Ritesh Mehta

7. DETAILED ANALYSIS
In case of Export of Service, it is prerequisite that payment against services rendered must be in convertible foreign exchange but at the same time such condition do not exist in case of export of Goods.
If a service is not an export of service under GST law then IGST shall require to be charged even if the place of supply is outside India and location of receiver is also outside India.
EXPORT OF SERVICES
Means any supply of service satisfying the following conditions-
The supplier of service is located in India
The recipient of service is located outside India
The place of provision of the service is outside India
The payment for such service has been received by the provider of service in convertible foreign exchange
The supplier of service and recipient of service are not merely establishments of a distinct person
Particular
Service Tax
GST
Export of Service
Not Taxable
Not an Export of Service
Taxable if POP is in India
Not taxable if POP is outside India
Taxable even if POS is outside India
By CA Ritesh Mehta

8. COMPARISION OF EXPORT OF SERVICES
Export of service – Finance Act 1994
Export of service – GST Act 1
The provider of service is located in the taxable territory
The supplier of service is located in India 2
The recipient of service is located outside India including Jammu & Kashmir
The recipient of service is located outside India 3
The service is not a service specified in the section 66D (Negative List) of the Act - 4
The place of provision of the service is outside India 5
The payment for such service has been received by the provider of service in convertible foreign exchange 6
The provider of service and recipient of service are not merely establishment of a distinct person in accordance with item (b) of Explanation 2 of clause (44) of section 65B of the Act
The supplier of service and recipient of service are not merely establishments of a distinct person Vs
By CA Ritesh Mehta

9. ZERO RATED SUPPLY
DETAILED ANALYSIS
It does not mean that the goods & services have a 0% rate of tax, but the recipient to whom the supply is made is entitled to pay 0% GST to supplier.
The concept of zero rated supply is there in the VAT laws with the credit benefit & refund. Also in Central Excise Law, there is rebate mechanism & refund of unutilised credit is available under the CCR, 2004 to the exporter of goods / services.
Supplier of zero rates goods/services can claim credit of input tax irrespective of the fact that such services/goods are notified as exempted supplies.
Supply to/by SEZ developers/unit will be treated as an inter-State supply.
Means any of the following supply of goods/services or both namely
Export of goods/services or both; or
Supply of goods /services or both to a SEZ developer or a SEZ unit
Zero Rated Supply
Export of goods/services
Actual Export
Supply of goods /services to a SEZ developer or an SEZ unit
Deemed Export
By CA Ritesh Mehta

10. TAXABILITY of ZERO RATED SUPPLY
By CA Ritesh Mehta

11. OPTION OF REFUND OF TAXES
Option of refund of taxes for the taxable person exporting goods and/or services
Option 1
Export goods and/or services under bond without Payment of IGST and claim refund of unutilized input tax credit
Option 2
Payment of IGST by debit to electronic credit ledger (but without collecting tax from the recipient)and claim refund of IGST so debited
DETAILED ANALYSIS
All the refund is subject to verification of concept of unjust mechanism. Care must be taken to not to include the refundable amount in the price charged to the overseas customer.
No such mechanism for Bond/Refund options for export of services under service tax law. Now, under GST Act, an assessee providing export of service shall be required either to claim refund or file bond as may be prescribed. This will be a major hardship for service providers whose major revenue is from export of services.
By CA Ritesh Mehta

12. ILLUSTRATION OF OPTION OF REFUND OF TAXES
Actual Export
Option 1
Option 2
ABC from Chennai supplies goods required by PQR in Delhi to exports to Germany
ABC to charge IGST (Rs.100) to PQR
PQR to avail input tax credit
PQR to issued invoice for €15
PQR to ensure no IGST is charged in the Euro invoice
PQR to claim refund of input tax credit of Rs.100 being maximum amount related to the outward export supply
ABC to charge IGST (Rs.100) to PQR
PQR to issued, invoice for €15 & to ensure no IGST is charged in the Euro invoice
But, PQR to debit electronic credit ledger with IGST applicable of Rs.180 on the export.
PQR to claim refund of Rs.180 debited in electronic credit ledger in respect of export
By CA Ritesh Mehta

13. ILLUSTRATION OF OPTION OF REFUND OF TAXES
Deemed Export
Option 1
Option 2
ABC from Hyderabad supplies goods required by PQR in Kolkata for supply to XYZ in Kolkata-SEZ (for use in authorized operations)
ABC to charge IGST (Rs.100) to PQR
PQR to avail input tax credit
PQR to supply goods to XYZ (SEZ) for Rs.1500
PQR to ensure no IGST is charged in invoice to XYZ
PQR to claim refund of input tax credit of Rs.100 being maximum amount related to the supply to XYZ (SEZ)
· ABC to charge IGST (Rs.100) to PQR
PQR to issued invoice to XYZ (SEZ) for Rs.1500
PQR to ensure no IGST is charged in invoice to XYZ
But, PQR to debit electronic credit ledger with IGST applicable of Rs.270 on the export
PQR to claim refund of Rs.270 debited in electronic credit ledger in respect of supply to XYZ (SEZ)
By CA Ritesh Mehta

14. ILLUSTRATION OF OPTION OF REFUND OF TAXES
Purchase
100
GST 12
Invoice Price
112
150 18
Net Sales Price
Sales
132
Net Profit 38 32
Refund
Gross Profit 50
By CA Ritesh Mehta

15. RELEVANT DATE FOR FILING OF REFUND APPLICATION
OPTION I
Situation for claiming refund
Relevant date
Refund of unutilized input tax credit on account of zero rated supplies without payment of any tax
End of the FY in which such claim for refund arises
Eg. The Unutilised Input Tax Credit has to be carried forward till the end of the F.Y i.e 31/03/2018 and then refund has to be claimed

16. RELEVANT DATE FOR FILING OF REFUND APPLICATION
OPTION II
Situation for claiming refund
Relevant date
Refund in case of zero rated supplies of goods on payment of integrated tax or the inputs or input services used in such goods
Export of goods by sea or air
Export of goods by land
Export of goods by post
Date on which the ship/ aircraft leaves India
Date on which the goods pass the frontier
Date of dispatch of goods by Post Office

17. RELEVANT DATE FOR FILING OF REFUND APPLICATION
OPTION II
Situation for claiming refund
Relevant date
Refund in case of zero rated supplies of services on payment of integrated tax or the inputs or input services used in such services
Supply of services has been completed prior to the receipt of payment of such services
Supply of services has been completed after the receipt of payment for such services
-Date of receipt of payment in convertible foreign exchange
-Date of issue of invoice

18. WHICH OPTION IS BENEFICIAL???
By CA Ritesh Mehta

19. THANK YOU….! CA Ritesh R. Mehta 9822472744 B. COM, FCA, DISA
I hope you enjoyed my presentation.
CA Ritesh R. Mehta B. COM, FCA, DISA