Exports and Imports and SEZ supplies
Provisions in CGST Act have been designed to make exports tax free. Supplies to SEZ units and SEZ developers are treated at par with physical exports. Following are the concessions for exports:
- Exemption from GST on final products or
- Refund of GST paid on inputs.
Zero rated supply
Zero rated supply means where there is no GST payable on the supply but the ITC on inputs can be availed. Export of goods/services and supply of goods/services to SEZ unit/developer will be zero rated supply.
The registered supplier has two options:
- Supply goods under bond without payment of IGST and claim refund of unutilised ITC or
- Supply goods on payment of IGST and claim refund of IGST paid on goods and services.
Refund of ITC in case of export of goods
- Refund available in case of zero rated supplies made without payment of tax.
- No refund where the goods exported out of India are subject to export duty.
- No refund if the supplier avails duty drawback of CGST/SGST/UTGST or claims refund of IGST paid on such supplies.
Deemed exports refer to those transactions in which goods supplied do not leave the country, and payment for such supplies is received either in Indian Rupees or in free foreign exchange. Benefits similar to physical exports may be granted to deemed exports under GST by issue of notification.
Import of goods
Supply of goods imported into the territory of India, till they cross the customs frontiers of India, shall be treated to be a supply of goods in the course of inter-state trade or commerce.
Warehouse is part of ‘customs area’ and hence IGST will be payable if sale is made in customs warehouse.