Export of Services without IGST and LUT
This query is : Resolved
03 April 2020
Hi,
I am handling a client which is a fully subsidiary of United States company. The main object of the company is to provide services from India to different countries in the world. It is a IT sector company and mainly have cost related to payroll, fixed assets, and office expenses. Transfer pricing law is applicable that is cost plus 15%. Now i have some queries related to sales and invoices,
1) Is it mandatory to raise Sales invoice every month and if yes then is GST applicable?
2) Since last 1 year the company has not mentioned IGST on their invoices and they have not even filed LUT for the same.
Please suggest me what to do for now and how can we rectify the mistakes for last year.
I am handling a client which is a fully subsidiary of United States company. The main object of the company is to provide services from India to different countries in the world. It is a IT sector company and mainly have cost related to payroll, fixed assets, and office expenses. Transfer pricing law is applicable that is cost plus 15%. Now i have some queries related to sales and invoices,
1) Is it mandatory to raise Sales invoice every month and if yes then is GST applicable?
2) Since last 1 year the company has not mentioned IGST on their invoices and they have not even filed LUT for the same.
Please suggest me what to do for now and how can we rectify the mistakes for last year.
04 April 2020
1 yes it's mandatory to raise invoice every month. IGST applicable if LUT not furnished.
2 For last year pay IGST with interest and claim refund of IGST paid. Furnish LUT for current year.
2 For last year pay IGST with interest and claim refund of IGST paid. Furnish LUT for current year.
04 April 2020
clause 4 of circular No. 37/11/2018-GST dated 15th March 2018, reproduced below is self explanatory :
4. Exports without LUT: Export of goods or services can be made without payment of integrated tax under the provisions of rule 96A of the Central Goods and Services Tax Rules, 2017 (the CGST Rules). Under the said provisions, an exporter is required to furnish a bond or Letter of Undertaking (LUT) to the jurisdictional Commissioner before effecting zero rated supplies. A detailed procedure for filing of LUT has already been specified vide Circular No. 8/8/2017 –GST dated 4th October, 2017. It has been brought to the notice of the Board that in some cases, such zero rated supplies have been made before filing the LUT and refund claims for unutilized input tax credit have been filed. 4.1. In this regard, it is emphasised that the substantive benefits of zero rating may not be denied where it has been established that exports in terms of the relevant provisions have been made. The delay in furnishing of LUT in such cases may be condoned and the facility for export under LUT may be allowed on ex post facto basis taking into account the facts and circumstances of each case.
Please file LUT now and to be safe side apply for condonation of non-filing of LUT for earlier export of service.
4. Exports without LUT: Export of goods or services can be made without payment of integrated tax under the provisions of rule 96A of the Central Goods and Services Tax Rules, 2017 (the CGST Rules). Under the said provisions, an exporter is required to furnish a bond or Letter of Undertaking (LUT) to the jurisdictional Commissioner before effecting zero rated supplies. A detailed procedure for filing of LUT has already been specified vide Circular No. 8/8/2017 –GST dated 4th October, 2017. It has been brought to the notice of the Board that in some cases, such zero rated supplies have been made before filing the LUT and refund claims for unutilized input tax credit have been filed. 4.1. In this regard, it is emphasised that the substantive benefits of zero rating may not be denied where it has been established that exports in terms of the relevant provisions have been made. The delay in furnishing of LUT in such cases may be condoned and the facility for export under LUT may be allowed on ex post facto basis taking into account the facts and circumstances of each case.
Please file LUT now and to be safe side apply for condonation of non-filing of LUT for earlier export of service.
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