Procedures to claim Drawback after GST implantation

 

GST and Drawback

 

 

No amendments have been made to the drawback provisions (Section 74 or Section 75) under Customs Act 1962 in the GST regime. Hence, the drawback scheme will continue in terms of both section 74 and section 75. Option of All Industry Rate (AIR) as well as Brand Rate under Section 75 shall also continue.

 

Drawback under Section 74 will refund Customs duties as well as Integrated Tax and Compensation Cess paid on imported goods which are re-exported.

 

Procedures to claim Drawback after GST implantationAt present Duty Drawback Scheme under Section 75 neutralises Customs duty, Central excise duty and Service Tax chargeable on any imported materials or excisable materials used or taxable services used as input services in the manufacture of export goods. Under GST regime, Drawback under Section 75 shall be limited to Customs duties on imported inputs and Central Excise duty on items specified in Fourth Schedule to Central Excise Act 1944 (specified petroleum products, tobacco etc.) used as inputs or fuel for captive power generation.

 

A transition period of three months is also being provided from date of implementation of GST i.e. 1.7.2017. During this period, existing duty drawback scheme under Section 75 shall continue. For exports during this period, exporters can claim higher rate of duty drawback (composite AIR) subject to conditions that no input tax credit of CGST/IGST is claimed, no refund of IGST paid on export goods is claimed and no CENVAT credit is carried forward. A declaration from exporter and certificate from jurisdictional GST officer in this regard has been prescribed in the notification related to AIRs. This will prevent double availement of neutralisation of input taxes. Similarly, the exporter can claim brand rate for Customs, Central Excise duties and Service Tax during this period.

 

Exporters also have the option of claiming only the Customs portion of AIR and claim refund/ITC under GST laws.

 

All Industry Rates for the transition period shall be notified before 1.7.2017. The AIR for post transition period shall be notified in due course of time.

 

The certificates from jurisdictional GST officer as referred above may not be available during initial days. As per Systems design, whenever higher rate (composite rate) of drawback is claimed, the non-availment of credit certificate is a mandatory document and unless it is recorded as available, shipping bill will not move to LEO stage. In such a situation, all field formations shall ensure that exports are not delayed for requirement of the said certificate. The way out in such situation for the exporter is to amend the shipping bill to claim lower rate. The exporter will have an option to file supplementary claim as per Drawback Rules at a later date once the certificate is obtained. A similar issue in respect of Cenvat credit has been examined and clarified in the past vide Instruction no. 609/159/2016-DBK dated 13.03.2014.

 

Secondly, it could be possible that export goods may be manufactured by using both Central Excise/Service Tax paid and CGST/IGST paid inputs and inputs services or only CGST/IGST

paid inputs and inputs services. In such situation, an exporter opting to claim composite rate of duty drawback during transition period has to give specified declaration and produce certificates as stated above so that he does not claim double benefit. Exporter will have to reverse the ITC if any availed and also ensure that he does not claim refund of ITC/IGST. Requisite certificate from GST officer shall also be required to this effect. As mentioned earlier, exporters will also have option of claiming credit/refund of CGST/IGST and claim Customs rate drawback.

Impact of GST on imports in India

Applicable import duty after GST implantation

How to calculate IGST under imports?

Changes in IEC after GST

Linking IEC with GSTIN in customs

Import under EPCG after GST

GST on imports by EOUs and SEZs

Changes of operation of SEZ

Does CVD exists under project imports?

Baggage clearance after GST implementation

Refund of SAD paid on imports

How to claim ITC under imports?

Procedures to claim Drawback after GST implantation

How to claim IGST refund on exports?

Export procedure changes after GST implementation

Factory stuffing procedures after GST implementation

Import of goods attracts IGST but not CVD under GST regime

Import goods attracts IGST and CVD under GST regime

Import Goods attract IGST, CVD and Compensation Cess under GST regime

Safeguard duty and Anti-dumping duty after GST implementation

 

Click here to know GST rate on Goods and Services

GST Exemption list of goods and services

Find HSN number or Service tariff code for GST

GST registration guidelines

Indian GST Laws

How to export your goods?

Learn exports imports free of cost


Comments


sony : Sir, Is this means whether we can claim SGST refund of the ITC even if we have opted for higher rate of AIR duty draw back?

J VIJAYA KUMAR: During the transition period of three months i.e. 1.7.2017 to 30.9.2017, composite rates of All Industry Rate (AIR) drawback are available to exporters, subject to certain conditions during transition period that ensure that input credit/refund under GST and drawback of composite rates are not taken together for the export product. Exporter has to produce certificate from jurisdictional GST officer to avail composite rate. This requirement is applicable to supplies for export made on or after 1.7.2017, as all exporters are required to operate under GST from that date. An exporter of insecticides and pesticides is also clearing the goods domestically and availed input tax credit of Central GST and input tax credit of the IGST paid on the inputs and input services used in the manufacture of export product. The exporter has carried forward the amount of cenvat credit on the inputs and input services used in the manufacture of the export product. The exporter claimed drawback of duty @ 1.5%. The question is whether the exporter is barred from taking input credit when the exporter is claiming duty drawback. The exporter is of the opinion that they are entitled to both input credit and drawback as drawback is incentive for export. The exporter is of the opinion that the position remains the same even under the Customs and Central Excise Duties Drawback Rules, 2017 and All Industry Rates of Drawback related changes as clarified by the Board vide Circular No. 38/2017-Customs dated 22.9.2017. The composite rates of Drawback have been discontinued w.e.f. 1.10.2017. The exporter has never obtained certificate from the jurisdictional GST Officer that no Input Tax Credit of CGST/IGST is claimed. The exporter also claims rewards under Merchandise Exports from India Scheme. Is the exporter correct in his opinion? Another exporter of paper confirmed that they are also claiming duty drawback and input credit simultaneously and interprets that composite rate of drawback becomes applicable when two or more goods are exported together. Could somebody clarify?

Dwarkeshwar Lal Sharma: I have apply for refund but local excise department told me you can not claim cgst on which no. 830299A claimed so department not give to us cgst , so i want to know what is the rule? Karan International Gst no. 09ALUPS1715P1Z5

sajeer: Dear Sir , We are coir exporters and we have 1% Drawback ,because we have not availed cenvat .Now our local refund office we cannot refund gst 01.07.2017-30.09.2017 due to high rate of drawback .please clarify .

Discussion Forum

You can also share your thoughts about this article.
Any one can answer on question posted by Readers