Q. On high-seas sales, will IGST be levied twice — first on high-seas sales and then on custom clearance?
The CBEC Circular no 33/2017-Cus dated August 1, 2017 clarifies that IGST on high-seas sale transactions of imported goods, whether one or multiple, will be levied and collected only at the time of importation — i.e. when import declarations are filed before the Customs authorities for customs clearance purposes for the first time. Further, value addition accruing in each such high-seas sale will form part of the value on which IGST is collected at the time of clearance. The importer (last buyer in the chain) would be required to furnish the entire chain of documents, such as original invoice, high-seas-sales contract, details of service charges/ commission paid etc., to establish a link between the first contracted price of the goods and the last transaction.
Q. We are merchant exporters, exporting our goods without payment of IGST, under letter of undertaking. Will this come in the way of our getting duty drawback?
No. In the notification no. 131/2016-Cus dated October 31, 2016, as amended, there is no condition denying drawback on the grounds that the goods have been exported under bond or letter of undertaking.
Q. We are engaged in providing commission agent services to principals based outside India. Supplies are made by our principals outside India to customers in India. Commission receivable by us is in foreign currency. We understand that GST is payable by us for our “intermediary services” at 18 per cent. Can we take input tax credit of the same?
No, because it is your outward supply and not an inward supply for you.
Q. We are a sole proprietorship firm offering BPO services to our clients located abroad. All our revenue is from outside India. Being so, sales tax was not applicable to us. We hope even GST is not applicable to us. Please advise.
Your activity falls within the definition of services given in Section 2(6) of the IGST Act, 2017, as you meet all the stipulated conditions mentioned therein. So, in accordance with Section 16 (1) of the said Act, your supplies are zero rated. You can export the services on payment of IGST and claim refund, or you can export the services without payment of IGST after furnishing bond or letter of undertaking. I suggest you see the CBEC Circulars no. 26/2017-Cus dated July 1, 2017, 2/2/2017-GST dated July 4, 2017 and 4/4/2017-GST dated July 7, 2017.
Q. We are manufacturers. We supply to projects funded by international agencies that are recognised as deemed exports under the Foreign Trade Policy. Earlier we used to clear goods without excise duty payment under notification no. 108/95-CE dated August 28, 1995. Can we supply our goods without payment of GST?
No. Section 2(39) of the CGST Act, 2017 defines “deemed exports” as such supplies of goods as may be notified under section 147, but no notification has been issued so far.