EXPORTERS ARE ELIGIBLE FOR REFUND OF GST COMPENSATION CESS
The
goods and services tax act, 2017 came into force with effect from 1.7.2017.
Under
GST regime exports would be considered as zero-rated supply. Any person making zero rated supply (i.e. any
exporter) 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 (Refunds) of the
Central Goods and Services Tax Act or the rules made there under (i.e. Refund
Rules 2017).
For
the option (a), procedure to file refund has been outlined in the Refund Rules
under GST. The exporter claiming refund of IGST will file an application
electronically through the Common Portal, either directly or through a
Facilitation Centre notified by the GST Commissioner. The application shall be
accompanied by documentary evidences as prescribed in the said rules. Application
for refund shall be filed only after the export manifest or an export report,
as the case may be, is delivered under section 41 of the Customs Act, 1962 in
respect of such goods.
For
the option (b), the shipping bill filed by an exporter shall be deemed to be an
application for refund of integrated tax paid on the goods exported out of
India and such application shall be deemed to have been filed only when the
person in charge of the conveyance carrying the export goods duly files an
export manifest or an export report covering the number and the date of
shipping bills or bills of export and the applicant has furnished a valid
return.
In
Circular No.1/1/2017 Compensation Cess dated 26.7.2017, the Central Board
of Excise and Customs (CBEC) has clarified that exporter is eligible for refund
of GST Compensation Cess in respect of goods exported by him.
The Board has explained this in a
circular issued on clarification regarding applicability of section 16 of the
IGST Act, 2017, relating to zero rated supply for the purpose of Compensation
Cess on exports.
Section 11(2) of the Goods and
Services tax (Compensation to States) Act, 2017 provides that provisions of
Integrated Goods and Services Tax Act, and the rules made thereunder, shall,
mutatis mutandis, apply in relation to the levy and collection of the cess
leviable under section 8 on the inter-State supply of goods and services, as
they apply in relation to the levy and collection of integrated tax on such
inter-State supplies under the said Act or the rules made thereunder.
“In view of the above, the Board has clarified
that provisions of section 16 of the IGST Act, 2017, relating to zero rated
supply will apply mutatis mutandis for the purpose of Compensation Cess (
wherever applicable), that is to say that:
a) Exporter will
be eligible for refund of Compensation Cess paid on goods exported by him [on
similar lines as refund of IGST under section 16(3) (b) of the IGST, 2017];
or
b) No Compensation
Cess will be charged on goods exported by an exporter under bond and he will be
eligible for refund of input tax credit of Compensation Cess relating to goods
exported [on similar lines as refund of input taxes under section 16(3) (a) of
the IGST, 2017],”
To view the Circular click the link given below:
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