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Export of Goods

Benktesh Pandey (Accountant) (23 Points)

17 July 2017

Dear Sir we have purchase goods like v belts.. from local market and export the same in nepal... Then what type of tax applies for us in gst on export of goods.

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2 Replies

Kunal Pansari (Accountant) (1037 Points)
Replied 18 July 2017

You have to charge IGST

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CA. Kuna Mohanty (Sr. Manager (Finance) MMTC Limited ) (55 Points)
Replied 18 July 2017

For local purchase of goods for export we need to pay CGST and SGST as applicable and as per provision of section on 7(5) of IGST Act that the Export of Goods or Service shall be deemed to be a supply of goods or service in the course of interstate trade. The IGST Act further provides that IGST will be payable for inter-state trade. However, u can export the goods without payment of IGST as as per rule 96A og CGST Rule 2017, Explained below.

Bond or Letter of Undertaking along with shipping bill

As per rule 96A of the Central Goods and Services Tax Rules, 2017, any registered person exporting goods without payment of integrated tax is required to furnish a bond or a letter of undertaking (LUT) in Form GST RFD-11.

The following registered person shall be eligible for submission of Letter of Undertaking in place of a bond:

(a) a status holder as specified in the Foreign Trade Policy 2015-2020; or

(b) who has received the due foreign inward remittances amounting to a minimum of 10 per cent of the export turnover, which should not be less than one crore rupees, in the preceding financial year, and he has not been prosecuted for any offence under the Central Goods and Services Tax Act, 2017 (12 of 2017) or under any of the existing laws in case where the amount of tax evaded exceeds two hundred and fifty lakh rupees.

The bond shall be furnished on a non-judicial stamp paper of the value as applicable in the state in which the bond is being furnished.

The exporters shall furnish a running bond, in case he is required to furnish a bond, in Form GST RFD-11. The bond would cover the amount of tax involved in the export based on estimated tax liability as assessed by the exporter himself.

Based on the track record of exporter, a bank guarantee required to be submitted along with the bond may be waived off by the jurisdictional GST Commissioner. The bank guarantee should normally not exceed 15 per cent of the bond amount.