How will our exports be treated under the Goods and Services Tax (GST) regime?
Exports will be treated as zero-rated supplies. No tax will be payable on exports of goods or services. However, you can take input tax credit (ITC). You will have the option to pay tax on the export goods/services and claim refund of Integrated GST (IGST) or export under Bond without payment of IGST and claim refund of ITC. However, no refund of unutilised ITC will be allowed in cases where the goods exported out of India are subjected to export duty or when you avail of drawback in respect of Central GST (CGST) or claim refund of the IGST paid on such supplies. The principle of unjust enrichment would not be applicable to zero-rated supplies. In case of refund on account of export of goods, the refund rules do not prescribe Bank Realisation Certificate (BRC) as a necessary document for filing of refund claim. However, for export of services, details of BRC are required to be submitted along with the application for refund. There may be no provision similar to the present dispensation of procuring inputs required for export production from domestic manufacturers without excise duty payment or under rebate claim. On export promotion schemes such as advance authorisation scheme or Export Promotion Capital Goods scheme, there is, as yet, no clarity on how these will be dealt with.
We are thinking of converting our manufacturing unit in the domestic tariff area (DTA) into an Export Oriented Unit (EOU). We are told that CBEC Circular no.77/99-Cus dated November 18, 1999 does not allow us to carry over our Cenvat Credit to an EOU. Is there any change in that instruction?
Yes. CBEC Circular no. 41/2016-Cus dated August 30, 2016 withdraws Circular no. 77/99-Cus dated November 18, 1999 and clarifies that on conversion from a DTA unit to an EOU, the transfer of unutilised Cenvat credit lying in the books of the DTA unit on the date of conversion into EOU unit is admissible.
Section 46(3) of the Customs Act, 1962 has been amended to provide for levy of charges for late presentation of bill of entry. Will these charges attract service tax on the ground that these are not fines or penalties but consideration for tolerating the act of not presenting the bill of entry within the specified time?
In my opinion, the essential nature of the levy is that of penalty/fine for delay, although Section 46(3) calls it “charges” and hence, no need to pay service tax.
As manufacturers, we have opted to authenticate invoices with a digital signature. Some customers demand manually authenticated invoices. Can we authenticate invoices by manual signature also?
Yes. You may print a copy of the invoice, sign it manually and forward the same to the customer. Such an invoice in effect would be authenticated by two signatures, digital as well as manual. Such an invoice would also be a valid document to avail of Cenvat Credit.