More of the GST rules thicket

Two weeks earlier, I wrote that the notifications for refund of Goods and Services Tax (GST) on deemed export and payment of 0.1 per cent GST on supplies to merchant exporters were more liberal than expected (Another set of new procedures, Oct 30). Some readers tell me it is not so. Last week, the Central Board of Excise and Customs (CBEC) gave new procedures for deemed export supplies to export-oriented units (EOUs) and some clarifications on export through merchant exporters.

On supplies to an EOU, the CBEC now says the former must issue a Form-A to the supplier, giving details of the goods to be supplied as pre-approved by the Development Commissioner, with copies to the jurisdictional tax authorities of the supplier and itself. On receipt of the supplies under tax invoice, the EOU must endorse this and send to the supplier, with copies to both sets of jurisdictional authorities. The EOU must maintain a record of such deemed export, containing the data elements prescribed in a FormB, a copy of which must reach its jurisdictional tax authorities by the 10th of the next month. The compliance burdens are, thus, increased and these additional safeguards appear unnecessary.

On export through merchant exporters, CBEC says the GST invoice details of the supplier of each item should be given in the ARE certificate and date columns in the shipping bills, which would appear in the printouts. The principal or additional place of business of the merchant will be deemed to be a registered warehouse; merchants may mask commercially sensitive information on the shipping bill copy furnished to the supplier. These clarifications are useful but CBEC should review the need for merchants to give the suppliers evidence of the export manifest/report (EGM) having been filed. Also, the relevant returns call for only the Integrated GST (IGST) paid on deemed export, whereas such supplies can also be made on payment of Central GST and State GST.

CBEC has said refund of the IGST paid on export goods cannot be made in many cases due to errors in the EGM, shipping bill and GSTR-1 returns of outward supplies for July. It says the common errors are incorrect shipping bill number in the July GSTR-1 (that may be corrected only through Table 9 of the August GSTR-1), mismatch of the invoice number and IGST paid amount in the shipping bill and GSTR-1, mismatch of information filed in the EGM and shipping bill or non-filing of EGM, wrong bank account details given to Customs and manual shipping bills filed at some Inland Container Depots.

However, these alone do not explain the fact that most exporters have still not got their refund of IGST paid on export goods. CBEC says the GST Network (GSTN, the system’s information technology backbone) has provided the utility to declare details of zero-rated supplies in Table 6A of GSTR-1 for August. Exporters have, however, reported difficulties in filing this in the GSTR-1E return, as the system does not accept it if the same return is not filed for the previous month. And, it cannot be filed for July, as GSTR-1 has already been filed.

GSTN should quickly resolve these issues and also enable filing of claims for refund of unutilised credit on account of export without IGST payment.