We have made a shipment denominated in Indian rupees to Thailand. We have received the payment through banking channels and our bank has informed us that the payment has been received through Vostro Account. Can we claim MEIS benefits on this shipment against such receipts?
Yes. As per Para 2.52 (b) of FTP, “export proceeds against specific exports may also be realized in rupees, provided it is through a freely convertible Vostro account of a non-resident bank situated in any country other than a member country of Asian Clearing Union (ACU) or Nepal or Bhutan. Additionally, rupee payment through Vostro account must be against payment in free foreign currency by buyer in his non-resident bank account. Free foreign exchange remitted by buyer to his non-resident bank (after deducting bank service charges) on account of this transaction would be taken as export realisation under export promotion schemes of FTP”. Therefore, you are eligible for MEIS against such receipts.
We have imported capital goods under EPCG authorisation, without payment of basic customs duty and IGST. Can we export goods on payment of IGST under refund claim for fulfilling average and specific export obligation against EPCG authorisation?
Yes. As per Rule 96 (10)(b) of CGST Rules, 2017: “The persons claiming refund of integrated tax paid on exports of goods or services should not have availed the benefit under notification No. 78/2017-Customs, dated the 13th October, 2017,…or notification No. 79/2017-Customs, dated the 13th October, 2017…except so far it relates to receipt of capital goods by such person against EPCG Scheme”. So, imports under EPCG scheme with or without IGST payment has no bearing on export of goods on IGST payment under refund claim.
As a tour operator rendering services on principal to principal basis to a foreigner, what are the GST implications for a trip outside India and for a trip in India? Please quote relevant provisions.
Section 13 of IGST Act, 2017 deals with determination of the place of supply of services where the location of the supplier of services or the location of the recipient of services is outside India. As per Section 13(2) of the said Act, the place of supply of services except the services specified in sub-sections (3) to (13) shall be the location of the recipient of services. Your service does not fall in any of those exclusions at sub-sections (3) to (13). So, the place of supply of service is the location of receiver of the service, a non-taxable territory. Accordingly, the service is not taxable.
Do we need to deduct payments for capital goods while computing NFE for the purpose of SEIS claims?
As per Para 3.08 (d) of FTP, “Net Foreign Exchange = Gross Earnings of Foreign Exchange minus Total expenses/payment/remittances of Foreign Exchange by the IEC holder, relating to service sector in the Financial year.” This provision does not exclude payments made for import of capital goods relating to the services sector.
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