Our valuable client who is a merchant exporter has raised the following queries in relation to sealing of containers, refund under GST and Letter of Undertaking which have been answered serially.
Q.1. Central Excise Truck sealing is mandatory or not against any excisable goods.
A.1. Sealing of Containers:
Board has in the past issued various circulars both on the Excise and Customs side on the issue of sealing of containers. At present, there are three categories of containers which arrive at the port/ICD:
- Containers stuffed at factory premises or warehouse under self-sealing procedure.
- Containers stuffed / sealed at factory premises or warehouse under supervision of central excise officer.
- Containers stuffed and sealed at Container Freight Stations/ Inland Container Depot.
For the sake of uniformity and ease of doing business, Board has decided to simplify the procedure relating to factory stuffing hitherto carried out under the supervision of the Central Excise officers. It has been decided to do away with the sealing of containers with export goods by CBEC officials. Instead, self-sealing procedure shall be followed subject to the following:
i. The exporter shall be under an obligation to inform the details of the premises whether a factory or warehouse or any other place where container stuffing is to be carried out, to the jurisdictional customs officer.
ii. The exporter should be registered under the GST and should be filing GSTRI and GSTR2. Where exporter is not a GST registrant, he shall bring the export goods to a Container Freight Station/Inland Container Depot for stuffing and sealing of container. However, in certain situations, an exporter may follow the self-sealing procedure even if he is not required to be registered under GST Laws. Such an exception is available to the Status Holders recognized by DGFT under a valid status holder certificate issued in this regard.
iii. Any exporter desirous of availing this procedure shall inform the jurisdictional Custom Officer of the rank of Superintendent or Appraiser of Customs, at least 15 days before the first planned movement of a consignment from his/her factory/ premises, about the intention to follow self- sealing procedure to export goods from the factory premises or warehouse. The jurisdictional Superintendent or an Appraiser or an Inspector of Customs shall visit the premises from where the export goods will be stuffed & sealed for export. The jurisdictional Superintendent or Inspector of Customs shall inspect the premises with regard to viability of stuffing of container in the premises and submit a report to the jurisdictional Deputy Commissioner of Customs or as the case may be the Assistant Commissioner of Customs within 48 hours. The jurisdictional Deputy Commissioner of Customs or as the case may be the Assistant Commissioner of Customs shall forward the proposal, in this regard to the Principal Commissioner/Commissioner of Customs who would grant permission for self sealing at the approved premises. Once the permission is granted, the exporter shall furnish only intimation to the jurisdictional Superintendent or Customs each time self-sealing is carried out at approved premises. The intimation, in this regard shall clearly mention the place and address of the approved premises, description of export goods and whether or not any incentive is being claimed.
iv. Where the visit report of the Superintendent or an Appraiser or an Inspector of Customs regarding viability of the stuffing at the factory/ premises is not favorable, the exporter shall bring the goods to the Container Freight Station /Inland Container Depot/Port for sealing purposes.
v. Self-Sealing permission once given by a Principal Commissioner/Commissioner of Customs shall be valid for export at all the customs stations. The customs formation granting the self sealing permission shall circulate the permission along with GSTIN of the exporter to all Custom Houses/Station concerned.
vi. Transport document for movement of self-sealed container by an exporter from factory or warehouse shall be same as the transport document prescribed under the GST Laws. In the case of an exporter who is not a GST registrant, way bill or transport challan or lorry receipt shall be the transport document.
vii. The exporter shall seal the container with the tamper proof electronic-seal of standard specification. The electronic seal should have a unique number which should be declared in the Shipping Bill. Before sealing the container, the exporter shall feed the data such as name of the exporter, IEC code, GSTIN number, description of the goods, tax invoice number, name of the authorized signatory (for affixing the e-seal) and Shipping Bill number in the electronic seal. Thereafter, container shall be sealed with the same electronic seal before leaving the premises.
viii. The exporter intending to clear export goods on self-clearance (without employing a Customs Broker) shall file the Shipping Bill under digital signature.
Board has decided that the above revised procedure regarding sealing of containers shall be effective from 01.09.2017. A future date has been prescribed since the returns under GST have been permitted to be filed by 10.09.17 and also with the purpose to give enough time to the stakeholders to adapt to the new procedures. Therefore, as a measure of facilitation, the existing practice of sealing the container with a bottle seal under Central Excise supervision or otherwise would continue. The extant circulars shall stand modified on 01.09.2017 to the extent the earlier procedure is contrary to the revised instructions given in this circular.
Q.2. ARE-1 / CT-1 is applicable for export consignment against Excise Duty?
A.2. ARE-1 procedure which was being followed is dispensed with except in respect of commodities to which provisions of Central Excise Act would continue to be applicable.
In order to ensure smooth transition from the earlier export procedure to the procedure being laid down for export of goods under the GST regime, the existing Shipping Bill formats (both manual/ electronic) have been modified to make them compliant with the IGST law. New formats of the Shipping Bill have been made applicable already.
Q.3. What is the procedure to get back GST refund?
A.3. Refund under GST can be claimed under the following two circumstances:
- Exports (including zero-rated supplies)
- Credit accumulation as a result of inverted duty structure on output supplies other than nil rated and fully exempt.
Refund on account of Export of Goods can be claimed within 2 years from the date on which proper officer given an order for export known as ‘Let Export Order’.
In case, where any exporter supplies goods or services or both under bond or Letter of Undertaking (LUT), subject to such conditions, safeguards and procedure as may be prescribed, procedure to file refund has been outlined in the Refund Rules under GST. The exporter claiming refund of IGST will file a FORM GST RFD-1 electronically through the Common Portal, either directly or through a Facilitation Centre notified by the GST Commissioner. The application shall be accompanied by documentary evidences as prescribed in the said rules. Application for refund shall be filed only after the export manifest or an export report, as the case may be, is delivered under section 41 of the Customs Act, 1962 in respect of such goods.
In case, where an exporter supplies goods or services or both, subject to such conditions, safeguards and procedure as may be prescribed, on payment of integrated tax , the shipping bill filed by an exporter shall be deemed to be an application for refund of integrated tax paid on the goods exported out of India and such application shall be deemed to have been filed only when the person in charge of the conveyance carrying the export goods duly files an export manifest or an export report covering the number and the date of shipping bills or bills of export and the applicant has furnished a valid return.
Q.4.How many days will take to get back the GST refund?
A.4. As per the GST Law the time limit for granting refund will be 90 days from date of system generated acknowledgement of refund. In case refund is not granted within prescribed time limited then an interest will have to be paid by the department. No refund shall be granted if the amount is less than Rs.1000/-.
Q.5. Is it mandatory to pay IGST against export Invoice?
A.5. No, it is not mandatory to pay IGST against export invoice. If any taxpayer wants to export without payment of IGST then he shall need to file a bond or a letter of undertaking to the department.
Q.6. What is LUT & is it applicable for us i.e. Merchant Exporter?
A.6. If any taxpayer wants to export without payment of IGST then he shall need to file a bond or a letter of undertaking to the department. A letter of undertaking (LTU) is the documents format of which is being prescribed under form GST RFD 11 under rule 96A.
In simple words, LTU is the document by which the taxpayer declares that he shall fulfill all the requirement of the GST with regard to export.
A registered person shall be eligible for submission of letter of undertaking in place of a bond if he has received the foreign inward remittance amounting to minimum of 10% of the export turnover and which should not be less than one crore in the proceeding financial year and he has not been prosecuted for any offence under the CGST Act, 2017 or under any of the existing laws in case where the amount of tax evaded exceeds Rs 2.5 lakhs.
A Letter of Undertaking in Form GST RFD-11, addressed to the President of India has to be executed by the Registered Person. As a transition provision, exports may be allowed under existing LUT’s till July 31, 2017, by which date, the above mentioned Form GST RFD-11 has to be furnished for future exports.
Presently, the module for furnishing of GST FORM RFD-11 is not available on the GST common portal. Hence, the Form GST RFD-11 has to be downloaded from cbec.gov.in and furnished manually to the jurisdictional Deputy/Assistant Commissioner.