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TMI BlogGuidance Note for Importers and Exporters-Reg.X X X X Extracts X X X X X X X X Extracts X X X X ..... s to bring clarity about the impact of GST, which would come into force with effect from 01.07.2017, for importers and exporters. On the imports side there would be no impact on levy of Basic Customs duty, Education Cess, Anti-dumping duty, Safeguard duty and the like. However, the Additional duties of Customs, which are in common parlance referred to as Countervailing Duty (CVD) and Special Additional duty of Customs (SAD), would be replaced with the levy of Integrated Goods and Services Tax (IGST), barring a few exceptions. On the exports side, export would be treated as zero-rated supply. Under zero-rated supply IGST paid on export goods or the input tax credit proportionate to the goods and services consumed in goods exported under bond/LUT would be refunded. A brief summary of the changes that would impact importers and exporters upon roll out of GST are encapsulated below: Imports under GST II. Duties at the time of import: In the GST regime, IGST and GST Compensation cess will be levied on imports by virtue of subsections (7) (9) of Section 3 of the Customs Tariff Act, 1975. Barring a few commodities such as pan masala, certain petroleum products which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bsite along with their HSN codes and applicable cess rates. The IGST Rates of Goods, Chapter wise IGST rate, GST Compensation Cess rates, IGST Exemption/Concession are available on CBEC website for trade and departmental officers as well. Valuation and method of calculation: IGST is leviable on the value of imported goods and for calculating integrated tax on any imported article, the value of such imported goods would be the aggregate of - (i) the value of imported article determined under sub-section (1) of section 14 of the Customs Act, 1962 or the tariff value fixed under sub-section (2) of the that section and (ii) any duty of Customs chargeable on that article under section 12 of the Customs Act, 1962 and any sum chargeable on that article under any law for the time being in force as an addition to, or as duty of Customs but does not include to the tax referred in the sub-section 7 (IGST) and sub-section 9 (Compensation Cess). The value of the imported article for the purpose of levying GST Compensation cess shall be, assessable value plus Basic Customs Duty levied under the Act, and any sum chargeable on the goods under any law for the time being in force, as a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e utilised only for payment of Customs duties or additional duties of Customs, on items not covered by GST, at the time of import. The scrips cannot be utilized for payment of Integrated Tax and Compensation Cess. Similarly, scrip cannot be used for payment of CGST, SGST or IGST for domestic procurements. VI. EOUs and SEZ: EOUs/EHTPs/STPs will be allowed to import goods without payment of basic customs duty (BCD) as well additional duties leviable under Section 3 (1) and 3(5) of the Customs Tariff Act. GST would be leviable on the import of input goods or services or both used in the manufacture by EOUs which can be taken as input tax credit (ITC). This ITC can be utilized for payment of GST taxes payable on the goods cleared in the DTA or refund of unutilized ITC can be claimed under Section 54(3) of CGST Act. In the GST regime, clearance of goods in DTA will attract GST besides payment of amount equal to BCD exemption availed on inputs used in such finished goods. DTA clearances of goods, which are not under GST, would attract Central Excise duties as before. VII. Imports/Procurement by SEZs: Authorised operations in connection with SEZs shall be exempted from pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... put tax credit of the integrated tax (IGST) and GST Compensation Cess shall be available to the importer and later to the recipients in the supply chain; however the credit of basic customs duty (BCD) would not be available. In order to avail ITC of IGST and GST Compensation Cess, an importer has to mandatorily declare GST Registration number (GSTIN) in the Bill of Entry. Provisional IDs issued by GSTN can be declared during the transition period. However, importers are advised to complete their registration process for GSTIN as ITC of IGST would be available based on GSTIN declared in the Bill of Entry. Input tax credit shall be availed by a registered person only if all the applicable particulars as prescribed in the Invoice Rules are contained in the said document, and the relevant information, as contained in the said document, is furnished in FORM GSTR-2 by such person. Customs EDI system would be interconnected with GSTN for validation of ITC. Further, Bill of Entry data in non-EDI locations would be digitized and used for validation of input tax credit provided by GSTN. Exports under GST XII. Drawback: No amendments have been made to the drawback provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that exports are not delayed for requirement of the said certificate. The way out in such situation for the exporter is to amend the shipping bill to claim lower rate. The exporter will have an option to file supplementary claim as per Drawback Rules at a later date once the certificate is obtained. A similar issue in respect of Cenvat credit has been examined and clarified in the past vide Instruction no. 609/159/2016-DBK dated 13.03.2014. Secondly, it could be possible that export goods may be manufactured by using both Central Excise/Service Tax paid and CGST/IGST paid inputs and inputs services or only CGST/IGST paid inputs and inputs services. In such situation, an exporter opting to claim composite rate of duty drawback during transition period has to give specified declaration and produce certificates as stated above so that he does not claim double benefit. Exporter will have to reverse the ITC if any availed and also ensure that he does not claim refund of ITC/IGST. Requisite certificate from GST officer shall also be required to this effect. As mentioned earlier, exporters will also have option of claiming credit/refund of CGST/IGST and claim Customs rate drawback. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion so as to ensure that the export benefits like refund of IGST paid as well as accumulated input tax credit can be processed seamlessly. For the benefit of the trade, modified Forms have been hosted on the departmental website, www.cbec.gov.in. Further, suitable notifications shall be issued to amend the relevant regulations and introduce modified Forms. XV. Export under factory stuffing procedures: In the context of GST, taking into account the obligation of filing GSTR1 and GSTR2 by exporters who are registered under GST, Board intends to simplify the procedure relating to factory stuffing hitherto carried out under the supervision of Central Excise officers. It is the endeavour of the Board to create a trust based environment where compliance in accordance with the extant laws is ensured by strengthening Risk Management System and Intelligence mechanism of the department. Suitable circular in this regard would be issued. Until then the extant instructions on the issue may be followed. XVI. This Public Notice will be applicable to all the field formations of Mumbai Zone-I Customs. The contents of this Public Notice are advisory in nature and for general guidance. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... including landing charges =Rs. 100/- (1) BCD- 10% (2) CVD- 12% (3) IGST-28 % (4) Education cess 2% (5) Higher education cess -1% (6) Compensation cess-10% In view of the above parameters, the calculation of duty would be as below: (a) BCD = ₹ 10 [10% of A.V.] (b) CVD = ₹ 13.2 [12% of (A.V. + BCD) (c) Education cess- ₹ 0.464 [2% of (BCD+CVD)] (d) Higher education cess- ₹ 0.232 [1% of (BCD+CVD)] (e) IGST- ₹ 34.69 [A.V. + (a) + (b) +(c) + (d)] x 28% (f) Compensation cess ₹ 12.389 [A.V. + (a) + (b) +(c) + (d)] x 10% Note: In cases where imported goods are liable to Anti-Dumping Duty or Safeguard Duty, calculation of Anti-Dumping Duty or Safeguard duty would be as per the respective notification issued for levy of such duty. It is also clarified that value for calculation of IGST as well as Compensation Cess shall also include Anti-Dumping Duty amount and Safeguard duty amount. Information guide on GST CBEC WEBSITE www.cbec.gov.in GSTN WEBSITE - www.gstn.org GST COUNCIL WEBSITE - www.gstindia.com/tag/gst-council CBEC MITRA [email protected] Toll free helpline 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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