Section 16 - Zero rated supply of IGST ACT, 2017

                  16. (1) “zero rated supply” means any of the following supplies of goods or services
or both, namely:––
                          (a) export of goods or services or both; or
                          (b) supply of goods or services or both to a Special Economic Zone developer
or a Special Economic Zone unit.
                    (2) Subject to the provisions of sub-section (5) of section 17 of the Central Goods
and Services Tax Act, credit of input tax may be availed for making zero-rated supplies,
notwithstanding that such supply may be an exempt supply.
                    (3) A registered person making zero rated supply shall be eligible to claim refund
under either of the following options, namely:––
                       (a) he may supply goods or services or both under bond or Letter of Undertaking,
subject to such conditions, safeguards and procedure as may be prescribed, without
payment of integrated tax and claim refund of unutilised input tax credit; or
                       (b) he may supply goods or services or both, subject to such conditions,
safeguards and procedure as may be prescribed, on payment of integrated tax and
claim refund of such tax paid on goods or services or both supplied,
in accordance with the provisions of section 54 of the Central Goods and Services Tax Act
or the rules made thereunder.

Analysis by Experts

By GST Payer, 6 years, 6 months ago

[To be published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i)]

Government of India Ministry of Finance (Department of Revenue )

[Central Board of Excise and Customs]

Notification No. 37 /2017 – Central Tax

New Delhi, the 4th  October, 2017

G.S.R....(E).- In exercise of the powers conferred by section 54 of the Central Goods and Services Tax Act, 2017, and section 20 of the Integrated Goods and Services Tax Act, 2017, sub-rule (5) of rule 96A of the Central Goods and Services Tax Rules, 2017, and in supersession of notification No. 16/2017- Central Tax, dated the 7th July, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 848 (E), dated the 7th July, 2017 except as respects things done or omitted to be done before such supersession, the Central Board of Excise and Customs hereby specifies conditions and safeguards for furnishing a Letter of Undertaking in place of a Bond by a registered person who intends to supply goods or services for export without payment of integrated tax -

  1. all registered persons who intend to supply goods or services for export without payment of integrated tax shall be eligible to furnish a Letter of Undertaking in place of a bond except those who have been prosecuted for any offence under the Central Goods and Services  Tax Act, 2017 (12 of 2017) or the Integrated Goods and Services Tax Act, 2017 (13 of 2017) or any of the existing laws in force in a case where the amount of tax evaded exceeds two hundred and fifty lakh rupees;
  2. the Letter of Undertaking shall be furnished on the letter head of the registered person, in duplicate, for a financial year in the annexure to FORM GST RFD – 11 referred to in sub-rule (1) of rule 96A of the Central Goods and Services Tax Rules, 2017 and it shall be executed by the working partner, the Managing Director or the Company Secretary or the proprietor or by a person duly authorised by such working partner or Board of Directors of such company or proprietor;
  3. where the registered person fails to pay the tax due along with interest, as specified under sub-rule (1) of rule 96A of Central Goods and Services Tax Rules, 2017, within the period mentioned in clause (a) or clause (b) of the said sub-rule, the facility of export without payment of integrated tax will be deemed to have been withdrawn and if the amount mentioned in the said sub-rule is paid, the facility of export without payment of integrated tax shall be restored.

2.     The provisions of this notification shall mutatis mutandis apply in respect of zero-rated supply of goods or services or both made by a registered person (including a Special Economic Zone developer or Special Economic Zone unit) to a Special Economic Zone developer or Special Economic Zone unit without payment of integrated tax.

[F. No. 349/74/2017-GST (Pt.) Vol.-II]

(Rohan) Under Secretary to the Government of India

Conclusion:

Now a person registered under GST regardless of earlier stipulated turnover and other requirements can export goods or services or both out of India or to SEZ or to an EOU without payment of GST.

Exports can be made with help of LUT.

This is a big relief to GST tax payers as lot of funds were stuck in refund procedures and exports were hampered due to GST compliance and documentations.

By Artisan Accounts, 6 years, 3 months ago

Hello sir

Export related issue 

I applied LUT in the month of dec before that (July - Nov) what treatment we do is either paying tax on export sale or not paying( treated as exempted)......   

 

By Udaysinh Sodha, 6 years ago

I am exporting goods to Nepal and do not want to claim refund of IGST.

Can I export u/s 16 "zero rated supply"  & without LUT ?

Please advise me.

With Thanks

 

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