01 June 2017
An export company in Kolkata purchase spices from Andhra Pradesh and export Bangladesh.
How calculate GST.?
When claim taxable amount?
Before GST exporter submit H form to get nil tax after GST exporter paid tax first then claim taxable amount?
Discuss with example.
26 July 2024
For an export company in Kolkata purchasing spices from Andhra Pradesh and exporting them to Bangladesh, GST regulations and procedures for claiming input tax credit (ITC) need to be followed meticulously. Here’s a detailed guide on how to calculate GST and handle ITC in such a scenario:
### GST Calculation and Input Tax Credit (ITC) for Export
1. **GST on Purchase of Goods**: - **Purchase from Andhra Pradesh**: When you buy spices from a supplier in Andhra Pradesh, GST is applicable on the purchase. For spices, the standard GST rate is typically 5%. Your supplier will charge GST on the invoice for the spices.
2. **GST on Export**: - **Export of Goods**: Exports are considered as “zero-rated supplies” under GST. This means that while the export itself is taxable, the applicable GST rate is 0%. This zero-rating ensures that the exporter does not bear the GST burden on exports.
3. **Claiming Input Tax Credit (ITC)**: - **ITC Eligibility**: As an exporter, you are eligible to claim a refund of the GST paid on inputs (spices, in this case) used for making zero-rated supplies. You can claim ITC on the GST paid on purchases made within India.
### Steps to Handle GST and ITC
1. **Calculate GST on Purchases**: - **Example**: Suppose you purchase spices worth ₹1L from Andhra Pradesh with a GST rate of 5%. - **GST on Purchase**: ₹1L × 5% = ₹5K - The total invoice amount will be ₹1.05L (including ₹5K GST).
2. **Export and GST Treatment**: - **Zero-Rated Supply**: When you export the spices to Bangladesh, the export is treated as zero-rated. This means you will not charge GST on the export invoice.
3. **Claiming ITC**: - **ITC Refund**: You can claim a refund for the GST paid on inputs used for the zero-rated export. This is done by filing for a refund under the GST laws. - **Procedure**: - **Filing Refund**: You need to file a refund claim under GST by using the appropriate forms, such as **GST RFD-01**. - **Documentation**: Submit the necessary documents including tax invoices, proof of export, and other required records. - **H Form**: For exports, if the supplier has issued an H Form (for exemption of tax on exports), ensure that you have this form to support your claim for a zero-rated supply.
### Example Calculation
1. **Purchase Invoice**: - Purchase Value: ₹1L - GST at 5%: ₹5K - Total Invoice Amount: ₹1.05L
3. **ITC Claim**: - You paid ₹5K GST on the purchase. - When exporting, you can claim a refund of ₹5K as ITC.
### Practical Steps
1. **Collect and Maintain Documentation**: - Ensure you have all invoices, shipping bills, and proof of export. - Maintain records of GST paid on inputs and the corresponding export documentation.
2. **File for Refund**: - Complete the refund application process through the GST portal. - Provide all supporting documents and forms as required.
3. **Monitor Compliance**: - Keep track of GST compliance and ensure all refund claims are filed accurately and timely.
### Summary
- **GST on Purchase**: You pay GST (e.g., 5%) on spices bought from Andhra Pradesh. - **Export GST**: Exports are zero-rated, meaning no GST is charged on the export invoice. - **Claim ITC**: Claim a refund of the GST paid on inputs by filing a refund application with necessary documentation.
By following these procedures, you ensure that you effectively manage GST on your export activities and claim the appropriate ITC refund. For precise guidance tailored to your specific situation, consulting with a GST professional or tax advisor is advisable.
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