Export and local sales - utlisation of itc

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Govind JK Kolappan (Querist)

10 June 2017 Dear sir / madam

We are a manufacturing company
buying local material and also import materials
i understand under GST on need to pay CG/SG or IGST for local purchases
on import material used for manufacturing of both localled sold and also for exports we need to pay BCD , IGST

Question
1. Whether we can make use of total input credit available - for local sales ( materials used for local sales or export )

2. if answer is no to Q1, then whether we need to maintain separate books for exports?

3. How can we claim back the BCD which are used for exports ?

Thanks

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

10 June 2017 1 Input credit available for local sales material used.
2 You need to maintain separate books for exports.
3 Claim duty draw back on BCD and IGST paid.

Govind JK Kolappan

Govind JK Kolappan (Querist)

10 June 2017

Dear Sir

Thank you , to put my question more clearly

we have input IGST of say 150000
out of this 100000 input materials is used for local market - material is ready but not sold anything within India.

balance material of which input credit is 50000 is used for export sales

export is say 20 Lacs of which 12% IGST , we will pay which comes to 2.4 lacs and we use input of entire 150000 and we pay net 90000

and go for refund of entire 2.4 paid under Export IGST
With kind regards

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

10 June 2017 1 No GST payable on exports IGST payable only on imports.
2 You can claim refund of input credit 50000 is used for export sales

Govind JK Kolappan

Govind JK Kolappan (Querist)

10 June 2017 Dear Sir
As per Section 16 (3) of IGST Act, one has the option to pay IGST on export of goods and adjust the input tax credit.
when we set off such ITC it means we can set off against input IGST and then CGST and SGST and pay net

seek your advice on the same
Section 16 (3) is reproduced below
(3) A registered person making zero rated supply shall be eligible to claim refund
under either of the following options, namely:––
(a) he may supply goods or services or both under bond or Letter of Undertaking,
subject to such conditions, safeguards and procedure as may be prescribed, without
payment of integrated tax and claim refund of unutilised input tax credit; or
(b) he may supply goods or services or both, subject to such conditions,
safeguards and procedure as may be prescribed, on payment of integrated tax and
claim refund of such tax paid on goods or services or both supplied,

my one more question is when we pay IGST on Export sales value, whether we can set off IGST of material used for export only or whether we can use IGST on material procured for local purchases - meant for local sales only.

Thank you
Govind

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

10 June 2017 You can utilize only IGST paid on material used for export only.

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