There is no provision to take ITC of CVD and SAD in the current GST laws
The Foreign Trade Policy (FTP) says that advance authorisation can be used for procurement from an Export Oriented Unit (EOU). It also says that EOUs must surrender the Basic Customs Duty (BCD) on inputs and charge GST on clearances into Domestic Tariff Area (DTA). There is no provision under GST laws to clear from EOU to DTA without GST payment against advance authorisation. Also, what happens when EOU materials are used by DTA in the manufacture of export goods? The BCD surrendered becomes part of the price and not charged as duty by the EOU. So, it cannot become part of drawback claim. How to get that part back?
Para 4.20 (a) of the FTP says that the holder of an advance authorisation/duty free import authorisation can procure inputs from indigenous supplier/State Trading Enterprise /EOU/ EHTP / BTP /STP in lieu of direct import. Such procurement can be against Advance Release Order (ARO), or Invalidation Letter.
Supplies to advance authorisation holder are treated as deemed exports under the GST laws. So, you can claim refund of the GST paid in accordance with Central Tax (Rate) notifications 48/2017 and 49/2017, both dated October 18, 2017. On the issue of drawback or exemption of BCD surrendered by EOU, there is no provision to compensate the exporter. This matter may be raised before the DGFT.
On an advance authorisation taken by us in 2015, we made imports during the pre-GST period but there is shortfall in fulfilment of export obligation. We want to regularise by payment of customs duty on unutilised material. Now, we are required to pay the BCD and additional duty of customs (CVD and SAD) as well as cess. Can we get Input Tax Credit (ITC) of CVD and SAD paid for regularisation of default?
There is no provision to take ITC of CVD and SAD in the current GST laws.
I suggest you write to DGFT, who can take up this matter with the Ministry of Finance.
In the Central Tax (Rate) Notification no. 40/2017 dt. October 23, 2017, issued for Merchant Exporters for Goods and Services Tax (GST) rate @ 0.05 per cent, under Para VI (b), they have used the word “Registered Warehouse”. Is some registration required from the customs or GST office, for this?
CBEC Circular no. 43/2017-Cus dated November 7, 2017 clarifies that for the purpose of above notification concerning supply to registered recipient at concessional GST, registered principal place of business or registered additional place of business shall be deemed to be a “registered warehouse”.
We have made a deemed export supply to EPCG authorisation holder against invalidation letter. The supply is within the State and so, we have paid CGST and SGST. How to report this in GSTR-1, when Table 6 has only a facility to report IGST? Secondly, what is the procedure to claim refund of GST?
There is no solution under the present dispensation for these problems. These matters may be raised before the DGFT for taking up with the Ministry of Finance.