GST ON EXPORT FREIGHT AND INSURANCE
This query is : Resolved
05 February 2022
On our exports on CIF basis, we are required to declare freight and insurance on the shipping bill so that the correct FOB amount is available to work out the drawback amount. At the time of export, we do not know the actual freight or insurance amount. So, we declare it on an approximate basis.
We are making export invoice with IGST @ 18%
Now, my question is
1. If we include Freight and insurance in Export Invoice, whether it would attract GST? And such GST is payable?
IF YES;
In GSTR – 1, in table No.6A, taxable value goes basic + Freight + Insurance and same for IGST amount.
For Example
Export Goods Value – RS.100000
Freight Expense – RS.15000
Insurance Expense – RS.10000
Total – RS.115000
IGST @ 18% - RS.20700 (ON RS.115000)
Now, the refunds of IGST are adjusted on FOB basis that means IGST paid on Freight, insurance are not refundable so on ICEGATE taxable Value will be RS.100000 and IGST amount will be RS.18000 (18% of 100000).
Hence, it will create mismatch among invoices shown in table 6A and invoices on ICEGATE.
IF NO:
If we don’t charge GST on Freight and Insurance in Export Invoice. Will it be okay? And can we show Freight Insurance Amount in GSTR – 1 in 0% tax rate field?
Please guide us above case for Invoicing, Accounting and GST Return.
We are making export invoice with IGST @ 18%
Now, my question is
1. If we include Freight and insurance in Export Invoice, whether it would attract GST? And such GST is payable?
IF YES;
In GSTR – 1, in table No.6A, taxable value goes basic + Freight + Insurance and same for IGST amount.
For Example
Export Goods Value – RS.100000
Freight Expense – RS.15000
Insurance Expense – RS.10000
Total – RS.115000
IGST @ 18% - RS.20700 (ON RS.115000)
Now, the refunds of IGST are adjusted on FOB basis that means IGST paid on Freight, insurance are not refundable so on ICEGATE taxable Value will be RS.100000 and IGST amount will be RS.18000 (18% of 100000).
Hence, it will create mismatch among invoices shown in table 6A and invoices on ICEGATE.
IF NO:
If we don’t charge GST on Freight and Insurance in Export Invoice. Will it be okay? And can we show Freight Insurance Amount in GSTR – 1 in 0% tax rate field?
Please guide us above case for Invoicing, Accounting and GST Return.
05 February 2022
1 No.
Yes, it's okay.
Yes, it's okay.
05 February 2022
But sir if we goes according option 1 that is YES, then invoice mismatch error will occur between ICEGATE and table No.6A of GSTR 1..because ICEGATE shows FOB value and GSTR 1 is on CIF value..then our IGST refund will not get release due to such mismatch
05 February 2022
If you are exporting on CIF basis then taxable value will include freight and insurance.
As far as refunds are concerned on exports on payment of IGST they are allowed only to the extent of tax on FOB value.
As far as refunds are concerned on exports on payment of IGST they are allowed only to the extent of tax on FOB value.
Message likes :
1 times
07 February 2022
Yes Exactly. So, if we are showing invoice on CIF basis in GSTR-1 than there will be a mismatch between ICEGATE and GSTR-1 invoices and our refund will not release. So, is it okay if we show CIF invoice at FOB value in GSTR-1 ?
07 February 2022
Yes Exactly. So, if we are showing invoice on CIF basis in GSTR-1 than there will be a mismatch between ICEGATE and GSTR-1 invoices and our refund will not release. So, is it okay if we show CIF invoice at FOB value in GSTR-1 ?
07 February 2022
There is no issue in mismatch between icegate and gst portal since both custom law and gst law are different and have different valuation. Export in custom is valued on FOB however in GST it is supply therefore it includes insurance and freight.
Therefore for CIF exports in gst return you will take full CIF value as taxable value
Therefore for CIF exports in gst return you will take full CIF value as taxable value
Message likes :
1 times
07 February 2022
Your refund won't get stuck but you will not get full refund. You would have paid IGST on CIF but will get refund only till the extent of fob value
Message likes :
1 times
07 February 2022
Okay. Thank You so much Sir for the quick response. However, one last question is in my mind.. If we show CIF export on FOB value in GSTR -1, will it be legal ?
07 February 2022
No
It will be in violation of sec 15 of cgst act
It will be in violation of sec 15 of cgst act
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Off Market debit and credit transaction
- Itr 1 processing
- Showing Gift from relative in ITR for this year
- Short Term Capital gain on shares bought and sold after 2018 onwards
- INCOME TAX ON REDEVELOPEMENT OF FLAT
- Share accounting-->fifo - capital gain - period as per fifo?
- Form 10E u/s 89(1). Need clarification because experts opinions differ !!!!
- ITR 2 Short Term gain & Long term gain
- ITR returnFY25-26
- ITR selection for salaries and capital gain less than L
- Difference in tax comparison report
- Gst invoice numbering and delivery challan numbering
- Sales amount in Gstr1
- E Commerce GSTR1 & 3B how to file
- GST Cancellation without jurisdiction
- Legal Opinion on Registrar's Refusal to Investigate a Society for Non-Renewal and Non-Compliance
- GST Refund_RFD-01
- Form10BD was uploaded successfully without any Error but after 24 hours, Form10BE are not available
- Annexure B utility for GST Refund
- Tax amount diff in Gstr1 and 3B in tax compare reports
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
