Impact of GST on Import, Export, EPCG, Advance Authorisation, DEEC, DFIA, SEIS & MEIS

Under the GST regime, Customs duties will be exempted on imports made under export promotion schemes namely EPCG, DEEC (Advance License) and DFIA. IGST and Compensation Cess will have to be paid on such imports.

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The EXIM scrips under the export incentive schemes of chapter 3 of FTP (for example MEIS and SEIS) can be utilised only for payment of Customs duties or additional duties of Customs, on items not covered by GST at the time of import. The scrips cannot be utilized for payment of Integrated Tax and Compensation Cess. Similarly, scrips cannot be used for payment of CGST, SGST or IGST for domestic procurements.

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As per the trade notice of the ministry, all imports including those by the exporters will attract GST. Exporters, however, can seek refund of the taxes paid.

It said that duty credit scrips, issued under export incentive schemes—Merchandise Exports from India Scheme (MEIS) and Services Exports from India Scheme (SEIS)—can not be used for payment of Integrated Goods and Services Tax (IGST) and GST compensation cess in imports. It also said that under the GST regime, no exemption from payment of integrated GST and compensation cess would be available for imports under advance authorisation.

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“Importers would need to pay IGST and take input tax credit,” the notice said.

For export-oriented units (EOUs), it said, they are allowed duty-free imports of goods for their authorised operations.

In GST regime, it said, the import of goods covered under GST would be exempted from the whole of the duty of customs.

“For the indigenous procurement of goods covered under GST, the EOU will not get ab-initio exemptions. Such supplies would be on payment of CGST/SGST/UTGST/IGST. The taxes so paid will be neutralised by ITC (input tax credit),” the notice said.

It also said that the duty drawback would be limited to the refund of basic custom duty only.

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