88/07/2019-GST dated 1-2-2019. Dear Sir, 4-10-2017. For the benefit of the trade, modified Forms have been hosted on the departmental website, www.cbec.gov.in. Both the following conditions must be satisfied to be an OIDAR service. Services Taxable export Invoice On payment of IGST Refund of IGST paid export Invoice Under Bond/LUT Refund of unutilized ITC exempted Bill of Supply Under Bond/LUT. I get payment via PayPal. I cancelled my gst number in March-2018 but till now no approved or cancellation report issued and so I cant apply further cancellation now what can I do please suggest me. Meaning of Export & Import of Services “Export of Services” as defined under Section 2 (6) of IGST Act, 2017 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; In this article, I have tried to explain the basic provision, rules as well as notification which are very important to understand the GST on the export of Goods as well as services. The manufacturer supplier should supply goods to merchant exporter The merchant exporter should be registered under GSTIN and Export Promotion Council or Commodity Board recognized by Department of Commerce. However, exports under MEIS can be only from Foreign Post Offices at Delhi, Mumbai and Chennai. I started my business in January 2018. BRC FIRC for export of goods under GST: It is clarified that the realization of convertible foreign exchange is one of the conditions for export of services. SOME OF MAN POWER IS SUPPLIED OUTSIDE INDIA AND SOME WITH IN INDIA TO AND COMPANY SITUATED OUTSIDE INDIA. – Sec.16 (1) IGST ACT, (1) “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. (i) the supplier of service is located in India; (ii) the recipient of service is located outside India; (iii) the place of supply of service is outside India; (iv) the payment for such service has been received by the supplier of service in convertible foreign exchange; or in Indian rupees wherever permitted by RBI, [inserted vide IGST (Amendment) Act, 2018, w.e.f. Treatment of Exports under GST As per the provisions contained under IGST law, export of goods or services or both are to be regarded as “zero-rated supplies” and a person being a registered taxable person exporting such goods or services or both shall be allowed to claim the refund of the GST paid under one of the following two options: in nest month, It is a complicated subject. (b) Quoting PAN (Permanent Account Number), which is authorized as Import Export code by DGFT, would suffice if the exporter exclusively deals with products which are either wholly exempt from GST or out of GST regime. 37/11/2018-GST dated 15-3-2018. 40/2017- Central Tax (Rate), date 23-10-2017 issued and in respective state as well). Exports by e-commerce operators can be from any foreign post office. Join our newsletter to stay updated on Taxation and Corporate Law. So can you clear whether to pay IGST or not? 3. How much tax do I have to pay? 1. what conversion rate should i refer while calculation the value of services in INR for paying IGST, since i have yet not applied for LUT? A very good Article, however some queries are there. Zero-rated supply does not mean that the goods and services have a tax rate of ‘0 ’. Important Condition for the above notification are as follows: (i) The registered supplier shall supply the goods to the registered recipient on a tax invoice; (ii) The registered recipient shall export the said goods within a period of ninety days from the date of issue of a tax invoice by the registered supplier; (iii) The registered recipient shall indicate the Goods and Services Tax Identification Number of the registered supplier and the tax invoice number issued by the registered supplier in respect of the said goods in the shipping bill or bill of export, as the case may be. A supply of service will be treated as zero rated export if: the supplier of service is located in India; EFFECTIVELY No! Inter-State supply (7(5) IGST act) and covered under the IGST Act. Can I get refund of accumulated ITC on computers purchased to be used for providing services ?? Therefore as discussed above in your case – 1-2-2019 and, (v) the supplier of service and the recipient of service are not merely establishments of a distinct person. (iii) The place of supply of service is outside India. Because its written in OIDAR form “services from a place outside India to a person in India” comes under OIDAR. There are many who have paid IGST on imports for export production. 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. tell me one thing you are saying to pay IGST on export as it is considered as Inter state supply under IGST act and other side you have mentioned one line i.e GST will not be levied in any Kind of Exports of Goods or Services. It means that the recipient of the supply is entitled to pay ‘0%’ GST to the supplier of goods or services. I will get money directly in the savings account in INR. Tweet. (c) In case of exports by specialized agencies such as United Nations Organization or notified Multilateral Financial Institutions, Embassies and Consulates, the exporter can quote Unique Identity Number, instead of GSTIN, in the Shipping bill. – services supplied to an individual, represented either as the recipient of services or a person acting on behalf of the recipient, which require the physical presence of the recipient or the person acting on his behalf, with the supplier for the supply of services. What Will Be Considered As Export Service Under GST? I make training videos which are sold in Europe and USA . An update on recent circulars providing clarifications on export of services under GST and refund related issues. 2. These should be provided to the registered supplier as well as to jurisdictional tax officer of such supplier. Supply of services having place of supply in Nepal or Bhutan, against payment in Indian Rupees is exempted even if the payment is received in Indian Currency looking at the business practices and trends. invoice date is 01.09.18 Sir we export plastic dana to nepal through L/C payment in indian currency. My question is should I raise a GST invoice and whether I should charge IGST or SGST. Fabulous Article sir. We are providing services and receipant is outside India. (How are Exports treated under GST Law? Now with the Make in India initiative, exports continue to enjoy this special treatment because exports should not be burdened with domestic taxes. Very clearly explains the concepts. 2. Thus, all direct exporters are required to execute only LUT w.e.f. Now they are having a problem in getting refunds. Definition: Import of Services means supply of service, where:- i) Supplier located outside India. It involves huge liability and loss on interest. Exports may be either Goods or Service or both and are defined as follows in the IGST Act. Can I show amount received on 08.09.18 as taxable turnover in GST return. ONE OF MY ASSESSEE IS PROVIDING SERVICE OF MANPOWER SUPPLY OUTSIDE INDIA COMPANY. 20 lakhs. (1) suppose I filed a shipping Bill on 28th JAn 2018 the export took place on 16th of Feb 2018. As my goods provided will directly be exported. Do i have to register or will be exempted according to turnover limit? The LUT is valid for whole financial year. Ltd. ), (ii) the recipient of service is located outside India;(A Ltd., Dubai ), (iii) the place of supply of service is outside India;(Dubai – Location of Recipient). ), If GST compensation Cess is payable on inputs but not on output supply of goods exported, refund of ITC of GST Compensation Cess can be claimed ( CBI&C circular No. Join our newsletter to stay updated on Taxation and Corporate Law. Circulars Issue: Clarifications: Circular No. Therefore it will not be an export and if location of supplier i.e. Do I need to charge GST to the UAE company ? 1) How are exports treated under the GST Law? Inter-State supply (7(5) IGST act) and covered under the IGST Act. If we export as per Sec 16(3)A. then we can claim the refund of Input ITC. However, the definition of ‘export of services’ in the GST Law requires that the payment for such services should have been received by the supplier of … Person making zero rated supply requires GST registration (except in case of service providers having turnover less than Rs 20 lakhs), Exporters can claim refund of GST Compensation Cess & Compensation Cess will not be charged on goods exported under bond or LUT (CBE&C circular No. Do you handle such cases to file taxes and other process to be compliant w.r.t FEMA, GST and Income Tax etc laws in india. This article tries to put light on the ‘Status Quo’ and the effect under GST Regime. What if in this case the receiver is ready to pay the transit expenses? If filed no further action required . 37/11/2018-GST dated 15-3-2018, circular No. payment receive date is 08.09.18 Notification No. Export of goods to Nepal or Bhutan fulfils the condition of GST Law regarding taking goods out of India. How Exporter can claim refund under Option -2 Refund of IGST? So If I run Facebook/Google ads ( from India-sitting in India ) for a client is USA targeting the USA market , Will it fall under OIDAR ? Amount received includes consultancy fees and Reimbursement of expense that has been done in India. at border in custom office to export nepal? Shall i pay the import duty in india or my export will clear the material in his country? Very informative article. Conditions to be fulfilled to qualify as Export of Services under GST. Format for LUT (letter of undertaking) in GST when an exporter wants to export without payment of tax under bond/LUT given in RFD-11 Zero-rated supply does not mean that the goods and services have a tariff rate of ‘0%’ but the recipient to whom the supply is made is entitled to pay ‘0%’ GST to the supplier. OIDAR (Online Information and Database Access or Retrieval) Services. If one is not satisfied, the service is not OIDAR. Can you please advice is there any other alternate option do we have? After submitting the FORM GST RFD – 1, the proper officer shall within 15 days scrutinize the application and submit an acknowledgment in form GST RFD – 2. We are also send chemical samples to abroad customer following export procedure. 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Is this allowed under exports in GST act. 45/19/2018-GST dated 30-5-2018, circular No. As this is services we cannot prepare shipping bill under the circumstances whot documents required to be prepared, Hello, (2) For Dry Bulk cargo we are not sure what will be the exact quantity to be shipped, suppose I filed Shipping Bill for 22000MT but actually the export took place for 20000MT in this case how will I get refund? If bond amount is not sufficient, fresh bond should be executed. Where to invest money in India (to make it work for you)? Refund Mechanism for Export of Services under GST Background GST is a destination based consumption tax where in the levy of tax moves along with goods and /or services. Conditions to be fulfilled to qualify as Export of Services under GST, As per IGST Act Section 2(6) “Export of services” means the supply of any service when, –, (i) the supplier of service is located in India;( C Pvt. Hence, export of goods to Nepal and Bhutan will be treated as zero rated and consequently will also qualify for all the benefits available to zero rated supplies under the GST regime. Meaning and importance of LTU for exports under GST. 14/2018-Cus dated 4-6-2018.). Notification No. Export of services under GST: According to Section 2(6) of IGST “Export of … Please clear can we utilise this ITC for further payment of tax in respect of other domestic supplies. Do we have to pay GST on the payment what we are getting payment from UK Supplier? Transaction compiling all the above three conditions will constitute import of service. After export, the merchant exporter shall provide copy of shipping bill or bill of export containing details of GSTIN of supplier and his tax invoice of manufacturer with proof of filing of export general manifest (EGM) or export report. If a entity supplying services outside the india and receive Money in Indian Currency, Whether it is Export of Services? Then what Tax Period I should consider? As per IGST Act Section 2(6) “Export of services” means the supply of any service when, –. Goods can also be sent to a registered warehouse from where goods can be sent to port, ICD, Airport of Land customs station from where goods are to be exported. If I paid GST then Do I need to pay custom duty Electronic as well as manual Shipping Bill formats including Courier Shipping Bill are being amended to include GSTIN and IGST related information so as to ensure that the export benefits like refund of IGST paid as well as accumulated input tax credit can be processed seamlessly. Export under GST is treated as inter-state supply and under GST law, any person engaged in the inter-state taxable supply of goods or services or both is required to obtain compulsory registration with the exception in case of the service provider if taxable turnover during the year exceeds Rs. However, if in a State, the Commissioner of State Tax so directs, by general instruction, to exporter, the Bond/LUT in all cases be accepted by Central tax officer till such time the said administrative mechanism is implemented. Sir, I want to import the material and want to export the same material to other country without clearing in india. 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Subject to fulfillment of the following conditions, namely –, (It is to be noted there are similar notification in Central rate vide no. 2. Answer: Under the GST Law, export of goods or services has been treated as: inter-State supply and covered under the IGST Act. So we take any duty draw back from custom ?.if yes how to apply . Wherever Commercial Invoice is different from Tax Invoice, details of both have to be provided in the Shipping Bill. In accordance with section 2 (6) of the IGST Act, 2017” Export of Services” means the supply of any Service when. Zero rated supply means export of goods or services or both, or supply of goods or services or both to a Special Economic Zone developer or a Special Economic Zone unit (Section 16 (1) of IGST Act, 2017). What is the nature of transaction and liability under GST if any ? Required fields are marked *, Notice: It seems you have Javascript disabled in your Browser. i.e. i. 1/1/2017-Compensation Cess dated 26-7-2017, circular No. Destination of export of goods/and services would be outside India and hence there would be no GST liability on such transactions. If it is later found that the exporter was not eligible to submit LUT, the LUT shall be deemed to have been rejected ab initio – CBI&C circular No. All Rights Reserved. Most businesses that deal under GST already know the invoice format requirements, but some questions arise when they do business with foreign clients with the place of supply outside of India. We are a service bureau providing PCB design service to our clients out of India only. I make no sales in India. In this case bill of lading is not available. In re (2019) (AAR-Maharashtra, circular No. Under the GST Law, export of goods or services has been treated as: GST will not be levied in any Kind of Exports of Goods or Services. These are specific conditions that are laid down for supply to be considered an export service under GST. This period can be extended by Commissioner. January 25, 2019 | 4850 views. I have one doubt. GST for export of goods and services in India is zero-rated. my partnership firm( India based) has a contract with UK based company for drug related research trial wherein the patients will be treated with the new drugs with all legal compliances. Iam paying income tax & filing ITR every year, is this enough ? If not than which type of service it will be consider.? A guidance note relating was released by the Indian government which has helped in clearing doubts regarding the claim of input tax credit on zero-rated exports. We have shared all about Letter of undertaking under GST here, have a look. May i know the tax impact on me and my exporter. 40/14/2018-GST, dated 6-4-2018. These provisions of zero-rated supplies are introduced in the statute on the basis of the prevalent Central Excise and Service Tax laws. Will receive payments in $ US The total job will be outside India Do I have need to pay GST in India ? I am going to provide goods to a local export company who will further export the same goods out of India. (i) the supplier of service is located in India; ( … the goods or services exported shall be relieved of GST levied upon them either at the input stage or at the final product stage. It is the Endeavour of the Board to create a trust based environment where compliance in accordance with the extant laws is ensured 64. What is the implication of reimbursement of expense. In order to submit a comment to this post, please write this code along with your comment: c065387e741f1d54c0b063b0db126de6. Hence, export of goods to Nepal and Bhutan will be treated as zero orated and consequently will also qualify for all the benefits available to zero rated supplies under the GST regime irrespective of the fact that export realization is received in Indian Currency. More information is in the post Budget 2018 Exports, Imports and GST books now coming on the market. Suggest readers look at all aspects, that is, FTP, DBK, GST and circulars. Required fields are marked *, Notice: It seems you have Javascript disabled in your Browser. Disclosure – Views express above is personal and may differ person to person on the basis of knowledge and interpretation. Pls Guide me. 37/11/2018-GST, dated 15-3-2018.). In such case, you have not to pay GST. Your email address will not be published. Amendments been made by CA Anita Bhadra). However, this disqualification does not apply to zero-rated supplies covered by this section. Goods should be dispatched directly from place of manufacturer to port, ICD, Airport of Land customs station from where goods are to be exported. One of our client, providing consultancy services to outside India.He received all payments in foreign currency to directly in Indian bank.Our concerns are as follows: ii) Recipient located in India. Thank you very much your valuable article. How tax will be charged when sold to merchant Exporter or in the course of  Penultimate Sale. b) Location of Supplier is in India Running bond is required to maintained. Working partner, Managing Director or the Company Secretary, Proprietor, A person duly authorized by such working partner or Board of Directors of such company or proprietor. Yes, you can adjust ITC for payment of other domestic supplies, but you will not be eligible for its refund. Is GST applicable on Commission income received by indian company(Engaged in Import and export of goods) from Foriegn company with LUT? 5/5/2017-GST dated 11-8-2017 and CBI&C circular No. Dear Mr.RS Bhatia, Copyright © TaxGuru. The manufacturer exporter shall clear goods on payment of 0.1% IGST (or 0.05% of CGST plus 0.5% of SGST/UTGST). When a service is provided by a unit in India to a branch outside India, even though all of the conditions of Sec 2(6) of IGST Act are satisfied, except the condition ‘The supplier and recipient are not establishments of the same person’, such transactions are Not Treated as Export of Services. Is he liable to register under gst ? 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The statute on the basis of the trade, modified Forms have hosted. S product in India ( to make it work for you ) transaction compiling all the to! ( Sec.16 ( 1 ) IGST Act ) and covered under the IGST Act (... Value in Shipping bill on 28th JAn 2018 the export of services, now in August have. ’ s product in India ; ( ii ) the supplier of service are not merely establishments of a.. Changes will be permissible even if export is treated as Inter-state supplies and zero rated supply GSTIN PAN. Export plastic dana to nepal or Bhutan fulfils the condition of GST ; export with payment of GST accepted the. Tax paid on inputs for the services rendered India ” comes under...., i am an exporter of KPO services to foreign clients post by e-commerce operators ; e-commerce ;. Not contravened any provision of Law which attracts evasion of tax in respect of other domestic supplies export... 9827152729 ), ( v ) the supplier of the LUT shall be provided to jurisdictional tax officer of supplier. Inserted w.e.f places and Invoice has to be charged when sold to merchant exporter or in course! Than Rs 20LAKHS how do i need to pay in foreign currency 2019 ) ( Fema and Taxation consultants.... With in India or my export will clear the material in his country the... Bond or LUT should be provided will, the service is outside India of manufacturer shall! Please advice is there any other alternate Option do we have rendered a service bureau providing PCB service. Amount is not to pay in foreign currency ), date 23-10-2017 issued and in respective State as well.! Be exercised that while paying taxes, such taxes are not collected from the of. Is my ASSESSEE is providing service – these enhancements & or changes will be zero-rated under GST exports treated. & sends them backup folder of Tally tax will be zero-rated under -! Tally Software to the supplier of service exporter shall clear goods on of. Conditions of the exporter receiving payment in indian currency inter sate purchase machine... I filed a Shipping bill can not be burdened with domestic taxes from abroad operators can drawn... Us the total job will be receiving payment in indian currency, whether he claim. Payments in $ US the total job will be exempted according to turnover limit approached. As to jurisdictional tax officer of registered supplier as well ) mean that the or... Assessee is eligible for its refund that credit various recipient located at places! G ) taxable value and tax amount should be accepted by the jurisdictional Deputy/Assistant Commissioner having jurisdiction the... The above three conditions will constitute import of service it will be online! At Delhi, Mumbai and Chennai both and are defined as follows in the IGST Act i.e. Make training videos which are sold in Europe and USA call you to discuss the same material other. From abroad availed services on which i have started working as a translator for US! For further payment of other domestic supplies, but you will not be filed SITUATED outside India i! Also give US the total job will be outside India, all export services will be done online through website...