procedure to claim exemption for expott shipment in clearing and forwarding business

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30 November 2017 please advise on procedure for exemption for export in clearing and forwarding busines

Guest

Guest (Querist)

01 December 2017 Expert Team pl advise...

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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10 August 2024 In the context of clearing and forwarding businesses, claiming exemptions or benefits for export shipments involves several procedural steps. The primary goal is to ensure that the service provided for export shipments is exempt from Goods and Services Tax (GST) or other applicable taxes. Here’s a detailed procedure to claim such exemptions:

### 1. **Understand the Exemption Criteria**

- **Export of Services:** Clearing and forwarding services related to the export of goods are generally considered an export of services and may be exempt from GST. Verify the specific exemption criteria under GST laws.

### 2. **Obtain Necessary Documentation**

- **Export Documentation:** Ensure you have all relevant export documentation, including:
- **Shipping Bill/Bill of Lading:** Proof of export shipment.
- **Export Invoice:** Invoice issued for the services provided.
- **Letter of Credit/Export Contract:** Details of the export contract or agreement.
- **Customs Documents:** Proof of customs clearance and export.

### 3. **Maintain Records**

- **Service Contracts:** Keep records of contracts with clients specifying the export services.
- **Invoices and Payments:** Maintain a record of invoices issued and payments received for export services.

### 4. **Filing GST Returns**

- **Zero-Rated Supply:** Export of services is typically treated as a zero-rated supply under GST. This means GST is not charged on the invoice, but you are eligible to claim a refund of the input tax credit (ITC) on inputs used to provide such services.

- **Filing GST Returns:**
- **GSTR-1:** Include details of export invoices and zero-rated supplies in your GSTR-1.
- **GSTR-3B:** Report the export supplies under zero-rated supplies in your GSTR-3B return.
- **GSTR-9/9C:** If applicable, include details in the annual GST return and reconciliation statement.

### 5. **Claim Input Tax Credit (ITC) Refund**

- **ITC Claim Process:**
- **Eligibility:** Verify that you are eligible to claim a refund of ITC related to the export services provided.
- **Form RFD-01:** Apply for a refund of ITC using Form RFD-01 on the GST portal. Ensure you provide details of the export invoices and the ITC claimed.

- **Documents Required for Refund:**
- **Refund Application Form RFD-01**
- **Copy of GSTR-1 and GSTR-3B returns**
- **Export Invoices**
- **Proof of Payment of Taxes (if any)**
- **Bank Details**

### 6. **Procedure for Claiming Exemption**

1. **File Export Declaration:**
- **GST Portal:** File the necessary declarations and returns on the GST portal, specifying that the services are related to exports and are zero-rated.

2. **Maintain Compliance:**
- **Audit Trail:** Ensure you maintain an audit trail of all documents and returns related to the export services.
- **Documentation:** Keep all documents related to the export, including proof of shipment and payment.

3. **Coordinate with Authorities:**
- **Consultation:** Consult with a tax advisor or GST consultant if there are any specific complexities or issues with claiming exemptions or refunds.

### 7. **Regular Review and Updates**

- **Stay Updated:** Regularly review changes in GST laws and procedures related to export services to ensure compliance.
- **Periodic Audits:** Conduct periodic internal audits to ensure that all export-related transactions are accurately recorded and exempted as required.

### Summary

1. **Verify Exemption Criteria:** Ensure export services qualify for exemption.
2. **Collect and Maintain Documentation:** Gather all necessary export-related documents.
3. **File GST Returns Accurately:** Report zero-rated supplies in GSTR-1 and GSTR-3B.
4. **Claim ITC Refund:** Apply for ITC refund using Form RFD-01.
5. **Follow Procedures and Compliance:** Maintain compliance with GST laws and procedures.

By following these steps, you can effectively claim exemptions for export shipments in the clearing and forwarding business. If there are any specific or complex issues, consulting with a tax professional is advisable.

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