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Export Procedures under GST: A Comprehensive Guide for Tax-Free and Zero-Rated Supplies

satyendra kumar , Last updated: 16 March 2024  
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Under the GST regime, export can be done in the following two ways:

  1. Export without payment of tax
  2. Export with payment of tax

Export without payment of tax

In this case exporter exports the goods without payment of taxes, they have to furnish a "Letter of Undertaking (LUT)" stating that all conditions regarding the export of goods have been fulfilled.

Export Procedures under GST: A Comprehensive Guide for Tax-Free and Zero-Rated Supplies

Zero rated Supply

As per the provision of section 16 of IGST act 2017, zero rated supply includes export of goods also. However, in case of zero-rated supply supplier need not to pay tax on such outward supply, still ITC is allowed to be availed, subject to section 16 and 17 of CGST act 2017, read with other relevant GST provisions of ITC availment. Wherein a registered person making zero rated supply shall be eligible to claim refund of unutilised input tax credit on supply of goods or services or both, without payment of integrated tax, under bond or Letter of Undertaking, in accordance with the provisions of section 54 of the Central Goods and Services Tax Act or the rules made thereunder, subject to such conditions, safeguards and procedure as may be prescribed. However, in case of non-realisation of sale proceeds, such registered person be liable to deposit the refund so received under this sub-section along with the applicable interest under section 50 of the Central Goods and Services Tax Act within thirty days after the expiry of the time limit prescribed under the Foreign Exchange Management Act, 1999 (42 of 1999.) for receipt of foreign exchange remittances, in such manner as may be prescribed.

Procedure to Export the goods without payment of IGST on such Export

1) As per Rule 96A of CGST rules, any registered person availing the option to supply goods or services for export without payment of integrated tax shall furnish, prior to export, a bond or a Letter of Undertaking in FORM GST RFD-11 to the jurisdictional Commissioner, binding himself to pay the tax due along with the interest specified under sub-section (1) of section 50 within a period of –

(a) fifteen days after the expiry of three months, or such further period as may be allowed by the Commissioner, from the date of issue of the invoice for export, if the goods are not exported out of India.

2) Such export invoices must be reported in GSTR-1.

3) Where the goods are not exported within fifteen days after the expiry of three months, or such further period as may be allowed by the Commissioner, from the date of issue of the invoice for export, and the registered person fails to pay the tax along with interest, the export as allowed under bond or Letter of Undertaking shall be withdrawn forthwith and the said amount shall be recovered from the registered person in accordance with the provisions of section 79. However, once the condition as mentioned above is being fulfilled exporter are again allowed to export the goods without payment of IGST under such bond or LUT.

4)  As per Notification No. 37/2017-Central Tax, All registered persons who intend to supply goods or services for export without payment of integrated tax shall be eligible to furnish a Letter of Undertaking in place of a bond except those persons, who have been prosecuted for any offence under the Central Goods and Services Tax Act, 2017 (12 of 2017) or the Integrated Goods and Services Tax Act, 2017 (13 of 2017) or any of the existing laws in force and where the amount of tax evaded exceeds Rs.2.5 Crore.

5)  The Letter of Undertaking shall be furnished on the letter-head of the registered person, in duplicate, for a financial year in the annexure to FORM GST RFD - 11.

 

6)  As per Rule 46 Export invoice must contained following particulars:

a) name, address and Goods and Services Tax Identification Number of the supplier;

b) a consecutive serial number not exceeding sixteen characters, in one or multiple series, containing alphabets or numerals or special characters hyphen or dash and slash symbolised as “-” and “/” respectively, and any combination thereof, unique for a financial year;

c) date of its issue

d) name and address of the recipient

e) address of delivery and name of the country of destination

f) Harmonized System of Nomenclature code for goods (HSN code)

g) description of goods or services

h) quantity in case of goods

i) taxable value of the supply of goods

j) place of supply

k) whether the tax is payable on reverse charge basis

l) signature or digital signature of the supplier

 

m) QR code and other particulars of E-invoice, in case of E-invoice issued as per Rule 48(4).

n) the invoice shall carry an endorsement; "SUPPLY MEANT FOR EXPORT/SUPPLY TO SEZ UNIT OR SEZ DEVELOPER FOR AUTHORISED OPERATIONS UNDER BOND OR LETTER OF UNDERTAKING WITHOUT PAYMENT OF INTEGRATED TAX."

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Published by

satyendra kumar
(accountant)
Category GST   Report

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