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TMI Blog2023 (6) TMI 1295X X X X Extracts X X X X X X X X Extracts X X X X ..... lowed to set off the IGST/CGST/SGST liability. The manner of issue of duty credit for goods exported under the Scheme for Rebate of State and Central Taxes and Levies, subject to such conditions and restrictions as specified herein, in accordance with Government of India, Ministry of Textiles' Notification No. 12015/11/2020-TTP dated the 13th August, 2021 has been discussed in Notification No. 77/2021-Customs (N.T.) dated 24th September, 2021. Duty Credit Scrips issued under RoSCTL Scheme is not taxable falling under HSN code 4907 inserted vide SI. No.-122A under Notification No.35/2017-Central Tax (Rate) dated 13.10.2017. Regarding, whether it is applicable to all duty credit scrips or not? It appears that it is applicable to all the duty credit scrips. It is pertinent to mention that only specific entry has been exempted i.e. Duty Credit Scrips. - UP ADRG 13/2022 - - - Dated:- 14-10-2022 - SHRI RAJENDRA KUMAR AND SHRI VIVEK ARYA, MEMBER Represented by : Mr. Santosh Kumar Gupta (C.A. Authorized representative) ORDER UNDER SECTION 98(4) OF THE CGST ACT, 2017 UNDER SECTION 98(4) OF THE UPGST ACT, 2017 1. M/s BVN Traders, a proprietor, registered w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der what scheme they have been issued. (b) Duty credit scrips issued under RoSCTL scheme issued by Directorate General of Foreign Trade is just like other duty credit scrips like MEIS/SEIS. The only difference is that RoSCTL is specific to textile industry. Therefore as per us, duty credit scrips issued under RoSCTL scheme should be exempted. 4.2 Details of Facts are as under: (1) Duty credit scrips nomenclature under HSN Code 4907 is zero tax rated under Serial No. 122(A) of Schedule 1 of G.S.T. Duty credit scrips has been inserted vide Notification No. 35/2017 Central Tax (Rate) dated 13.10.2017. Hence it is tax free from 13.10.2017. (2) It is also worth mentioning here that the term Duty Credit Scrips has been used in Schedule I of GST because it is a wide term. All types of duty Credit Scrips come under this classification irrespective of whether it is issued by Customs/DGFT in respect of any particular item. The jurisdiction for adjustment/exemption of duty is vested in the RoSCTL Duty Credit Scrips. It is transferable. Duty credit and transfer are clearly mentioned in its license. These are exempted from tax under S.No. 122A of Notification No. 02/2017-Centra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e entire amount in the said e-scrip to another person and transfer of the duty credit in part shall not be permitted. Q.(c) Will the transfer of e-scrip alter the validity of the e-scrip? Ans The period of validity of the e-scrip, of one year from the creation, shall not change on account of transfer of the e-scrip. Q.(d) Which are the duties and taxes against which RoSCTL benefit can be utilized? Ans The duty credit issued under the RoSCTL scheme and available in the electronic duty credit ledger shall be used for payment of duties of customs leviable under the First Schedule to the Customs Tariff Act, 1975(51 of 1975) on goods when imported into India. It cannot be utilized towards payment of any other taxes like IGST, Compensation Cess etc. upon the import of goods. 4.3 That the Circular No. 46/20/2018-GST dated June 06, 2018 has been issued by the Tax Research Unit, Government of India Ministry of Finance, Department of Revenue. It is clear from para No. 7 of this Circular that the duty credit scrips, however, attract Nil GST under S.No. 122A of Notification No. 2/2017-Central Tax (Rate) dated 28.06.2017. This para-7 is as follows. Accordingly, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... into such field which is in the interest of the mankind and environment. Therefore, the DFIA, which are similar to the duty credit scrips in terms of the functionalities and significance in the export promotion, cannot kept together with such REC and PSLC by applying the role of interpretation of Noscitur a RoSCTL into the phrase as such, various certificates like REC, PSLC, etc.. of the circular cited above in para 12. Thus on plain reading of the Para 6 7 of the said circular reproduced above, it is conspicuous that the Board, while clarifying the same of classification of the various certificates and scrips and taxability thereon, has used the Duty paying scrips and duty credit scrips interchangeably in Para 6 respectively. Thus, assuming the significance and relevance of the each word and phrase, that the legislation contains and on the belief that each and every word or phrase in any legislation has to be given the significance and weight that they deserve, we are compelled to interpret that the both the words duty paying scrips and duty credit scrips are to be construed same. Thus from the above discussion, we conclude that the DFIA, also popularly known as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... October, 2017 G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 11 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 2/2017-Central Tax (Rate), dated the 28th June, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 674(E), dated the 28th June, 2017, namely:- In the said notification,- (A) in the Schedule,- (i) after S. No. 122 and the entries relating thereto, the following serial number and the entries shall be inserted, namely: - 122A 4907 Duty Credit Scrips ; [F/No.354/117/2017-TRU (Pt. Ill)] (Ruchi Bisht) Under Secretary to the Government of India Note : - The principal notification No.2/2017-Central Tax (Rate), dated the 28th June, 2017 was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eproduced below: [TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (1)] GOVERNMENT OF INDIA MINISTRY OF FINANCE (Department of Revenue) Notification No. 8/2021-Central Tax (Rate) New Delhi, the 30th September, 2021 G.S.R.....(E).- In exercise of the powers conferred by sub-section (1) of section 9 and subsection (5) of section 15 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council, hereby makes the following further amendments in the Notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 1/2017-Central Tax (Rate), dated the 28th June, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 673(E)., dated the 28th June, 2017, namely:- In the said Notification, - (a) in Schedule I-2.5%, (b) in Schedule II-6%, (c) in Schedule III-9%, - after c(i), (ii), (ii) (iv) after S. No. 157 and the entries relating thereto, the following S. No. and entries shall be inserted, namely: 157A. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which advance ruling required- 1. Whether Duty Credit Scrips issued under RoSCTL scheme issued by Directorate General of Foreign Trade is taxable or exempt under GST schedule I, Sl. No.-122A HSN code 4907? 2. Whether Notification No. 35/2017-Central Tax (Rate) dated 13th October 2017 is applicable to all duty credit scrips or not? 9. Before proceeding the issue we would like to discuss the nature and details of the ROSCTL scheme in brief: 9.1 INTRODUCTION OF RoSCTL SCHEME: Vide Notification No. 14/26/2016-IT(VOL.II) dated 07.03.2019 of the Ministry of Textiles, the Government of India has introduced a new Scheme namely Scheme for Rebate of State and Central Taxes and Levies [hereinafter referred to as RoSCTL ] on Export of Garments and Made-ups. This Scheme has been introduced as a replacement of previous Rebate of State Levies (RoSL) Scheme which provided only rebates of state taxes. Vide aforesaid notification dated 07.03.2019, the RoSCTL Scheme were made effective from the date of Notification i.e. w.e.f. 07.03.2019 with an expiry date of 31.03.2020 which has now been extended up to 31.03.2024. Prior to introduction of the RoSCTL scheme, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rates, as notified vide Ministry of Textiles' Notification Nos. 14/26/2016-IT (Vol.II) dated 07.03.2019 and 14/26/2016-IT (Vol.II) dated 8.3.2019, respectively. Further, the Government, vide MOT Notification No. 12015/11/2020-TTP dated 13.08.2021 decided to continue the RoSCTL Scheme w.e.f. 01st January 2021 till 31st March 2024 for apparel/garments (under Chapter 61 and 62) and Made-ups (under Chapter 63) in exclusion of RoDTEP for these Chapters with the rates, as notified by the Ministry of Textiles vide Notification no. 14/26/2016-IT (Vol.II) dated 08th March 2019 subject to review of rates periodically. The other textiles products (excluding Chapter 61, 62 and 63) which are not covered under the RoSCTL shall be eligible to avail the benefits, if any, under RoDTEP along with other products, as to be finalised by Department of Commerce. Vide Notification No. 12015/11/2020-TTP dated 13.08.2021 of the Ministry of Textiles also issued a revised Guidelines for Continuation of RoSCTL Scheme. The Scheme shall be implemented by Department of Revenue with end-to-end digitization for issuance of transferable Duty Credit Scrip, which will be maintained in an electronic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsistent with the Scheme, has been notified by the Department of Revenue under Notification No. 77/2021- Customs (N.T.) dated 24.09.2021. Detailed ICEGATE Advisory No. 06/2021 dated 01.10.2021 and ICES Advisory No. 23/2021 dated 30.09.2021 have also been issued by the Directorate General of Systems and Data Management, outlining the mechanism of enabling RoSCTL claims in the shipping Bills, Processing of claims, Scroll Generation, creation of an e-scrip account, generation of duty credit scrips, transfer of scrips and utilization of scrips. Duty Credit Scrip (DCS) is an incentive scheme which is an export promotion benefit offered by the Government of India under the Foreign Trade Policy (FTP) 2015. Under the FTP 2015-20, MEIS/SEIS/RoDTEP Schemes intends to incentivise exports of goods manufactured in India or produced in India or exported from India. The duty credit scrips can be utilised to pay customs duties on import of inputs or goods, safeguard duty, anti-dumping duty and any other customs duty under FTP 2015-20. It cannot be utilised for payment of GST. Scrips can be freely traded and transferable i.e., Exporters who are able to use the same for their own consumption use ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rewards under MEIS and SEIS. The Duty Credit Scrips and goods imported / domestically procured against them shall be freely transferable. The Duty Credit Scrips can be used for: (i) Payment of Basic Customs Duty and Additional Customs Duty specified under sections 3(1), 3 (3) and 3 (5) of the Customs Tariff Act, 1975 for import of inputs or goods, including capital goods, as per DOR Notification, except certain specified items. From this, it is clear that the duty credit scrips are the instruments to award incentives to the exporters with the objective of the export promotion by allowing them to set off the basic customs duty against it. It is also to be noted that the duty credit scrips are not allowed to set off the IGST/CGST/SGST liability. 13. Now, we intend to comprehend the meaning of RoSCTL. It is observed that the meaning of the RoSCTL is also not provided in the GST Law. Hence, we resort to the same FTP, which has dealt with this term, RoSCTL. RoSCTL is mentioned at point no.(c) of para 4.01 of the Chapter 4 of the FTP, which is as Scheme for Rebate on State and Central Taxes and Levies (RoSCTL), as notified by the Ministry of Textiles on 07.03.2019, and implemented by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of export proceeds. Revised guidelines for continuation and implementation of the RoSCTL scheme is Annexed herewith. 13.3 The nature of Rebate mentioned at Para 4 of Annexure issued with notification issued by Ministry of Textiles dated 13th August 2021 says that:- ..................... 4.1. The rebate under the Scheme shall be in the form of duty credit scrips. The scrips shall be issued electronically on Customs system. The duty credit scrips shall be used for payment of Basic Customs Duty on import of goods. These scrips shall be freely transferable. The relevant notification, as regard the manner of utilization of scrip for payment of basic customs duty and other modalities, including conditions relating thereto, consistent with the Scheme, shall be issued by the Department of Revenue. 6. CLAIM FOR REBATE 6.1 An exporter opting for this scheme shall make claim for rebate on exports at item-level, in accordance with the guidelines as may be issued by the Department of Revenue, for operationalising the scheme on Customs system. 6.2 Electronic duty credit ledger will be created by the Customs Authority and the exporter may generate electronic Duty C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sified under heading 4907 and will accordingly attract GST @ 12 %, though duty paying scrips classifiable under the same heading will attract Nil GST{under S.No. 122A of Notification No. 2/2017-Central Tax (Rate) dated 28.06.2017, as amended vide Notification No. 35/2017-Central Tax (Rate) dated 13.10.2017}. 7. Accordingly, in modification of S.No. 3 of Circular No. 34/8/2018- GST dated 01.03.2018, it is hereby clarified that Renewable Energy Certificates (RECs) and Priority Sector Lending Certificates (PSLCs) and other similar documents are classifiable under heading 4907 and attract 12% GST. The duty credit scrips, however, attract Nil GST under S.No. 122A of Notification No. 2/2017-Central Tax (Rate) dated 28.06.2017. 17. As such the question raised by the applicant whether Duty Credit Scrips issued under RoSCTL scheme is taxable or exempt under GST schedule I, SI. No.-122A HSN code 4907. In view of above facts and discussions we are of the opinion that Duty Credit Scrips issued under RoSCTL Scheme is not taxable falling under HSN code 4907 inserted vide SI. No.-122A under Notification No.35/2017-Central Tax (Rate) dated 13.10.2017. Regarding, whether it is applicable ..... X X X X Extracts X X X X X X X X Extracts X X X X
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