CBIC Notifies GST Exemption for Exports at Concessional Rate of 0.1%

In a significant move to boost exports, the Central Government has issued Notification G.S.R. 62(E) under the Central Goods and Services Tax Act, 2017, Goods and Services Tax (Compensation to States) Act, 2017, and the Integrated Goods and Services Tax Act, 2017. The notification exempts intra-state and inter-state supply of taxable goods meant for export from the compensation cess above 0.1%, subject to specific conditions.

This measure, effective immediately, aims to streamline export operations and incentivize registered suppliers and recipients involved in international trade. Below are the key highlights and conditions of the notification:

Key Conditions for Availing the Exemption

1. Tax Invoice Requirement:

   • The registered supplier must issue a tax invoice to the registered recipient.

2. Export Timeline:

   • The registered recipient must export the goods within 90 days from the date of the tax invoice.

3. Shipping Documentation:

   • The recipient must indicate the supplier's GSTIN and tax invoice details in the shipping bill or bill of export.

4. Export Promotion Council Registration:

   • The recipient must be registered with an Export Promotion Council or Commodity Board recognized by the Department of Commerce.

5. Order Placement and Notification:

   • A copy of the procurement order must be shared with the jurisdictional tax officer of the supplier.

6. Movement of Goods:

   • Goods must move directly to a port, Inland Container Depot (ICD), airport, or Land Customs Station for export or to a registered warehouse for aggregation before export.

7. Warehouse Aggregation:

   • For aggregated exports, the recipient must endorse receipt of goods on the tax invoice and secure acknowledgment from the warehouse operator. These documents must be submitted to the supplier and their jurisdictional tax officer.

8. Proof of Export:

   • After export, the recipient must provide the shipping bill, export general manifest, or export report, along with proof of filing, to both the supplier and the tax officer.

Important Caveat

If the recipient fails to export the goods within the stipulated 90 days, the supplier will no longer be eligible for this concessional rate exemption.

Implications

This notification reflects the government’s commitment to supporting exporters by minimizing tax burdens and enhancing compliance clarity. By leveraging this exemption, businesses can achieve greater operational efficiency and cost savings in export-related activities.

For exporters and suppliers seeking more details, consulting a tax professional is highly recommended to ensure compliance with the prescribed conditions.

Official copy of the notification has been attached