CBIC guidance: IGST replaces CVD and SAD on imports, exports zero rated

In short: FPAC

FFacts

From 01.07.2017 CVD and SAD on imports are replaced by IGST, with GST Compensation Cess on items such as aerated waters, tobacco products and motor vehicles, while Basic Customs duty, Education Cess, anti dumping and safeguard duty continue; exports are zero rated.

PProvisions and law

Sub-sections (7) and (9) of Section 3 of the Customs Tariff Act, 1975, notification 01/2017-Integrated Tax (Rate) dated 28-06-2017, section 5 of the IGST Act, 2017, Section 14 of the Customs Act, 1962, Section 54(3) and Section 140(3) and (5) of the CGST Act, Sections 74 and 75 of the Customs Act, 1962, Baggage Rules, 2016.

AAnalysis

IGST rates are Nil, 0.25%, 3%, 5%, 12%, 18% and 28%; anti dumping and safeguard duties now form part of the value for IGST and Compensation Cess, project imports under 9801 attract 18%, baggage is fully exempt from IGST, and EXIM scrips cannot pay IGST or Compensation Cess.

CConclusion

Declare GSTIN in every Bill of Entry, since input tax credit of IGST and Compensation Cess flows only on that basis, and BCD credit is not available.

What to do

1. InformationCheck the IGST rate, Compensation Cess rate and exemption entry for your goods from the schedules under notification 01/2017-Integrated Tax (Rate).
2. DiscussionDecide between the composite All Industry Rate drawback and claiming refund or input tax credit under GST, since both cannot be taken together.
3. FormsQuote GSTIN along with IEC in the Bill of Entry, and report invoice particulars in FORM GSTR-2 for credit.
4. DeliverablesA duty working that adds anti dumping and safeguard duty into the IGST and cess value, plus a clean input tax credit trail.

Steps follow IDFD: Information, Discussion, Forms, Deliverables.