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Export and Import under GST

Export and Import under GST
What do the term export and import mean under GST?

Exports and Imports plays a vital role in the growth of the economy by pooling in foreign exchange through international borders. Under GST act export means to supply goods outside the border of India whereas import means the supply of goods inside India through international borders.

Moreover, IGST will be applicable to the goods which are imported to India according to the IGST Act. Furthermore, if the goods are exported from India then that supply will be deemed as zero-rated. Hence no tax rate shall be applied on it.

The e-way bill applicability on imports and exports

As per section 7(2) of IGST Act, the goods that are imported in India, till they pass the customs borders of India shall be treated as inter-state supply. Hence, e-way bill provisions will be applicable to the imports as well. Let us see the applicability of it and when shall the taxpayer generate the e-way bill under imports.

Import Procedures

There is a typical procedure that is involved in the imports. These procedures include different stages.

Export and Import under GST

Stage 1:  When the goods have arrived at port or airport then the goods are said to be imported.

Stage 2:  After the arrival of goods at the port, they remain under the customs custody.

Stage 3:  From the customs custody, the goods are further transferred for clearance to either CFS (Container Freight Station) or ICD (Inland Courier Depot). Under rule 138, these kinds of transactions are exempted that means they do not have to generate an e-way bill for this transaction.

Stage 4:  Then these goods are further transacted from CFS or ICD, either to

  • The bonded warehouse; or
  • The factories or businesses consumptions.

In the first case, if there is a transaction between the ICD or CFS to bonded warehouses, that transaction will be exempted from the provisions of generating the e-way bill. Once the goods are out from the warehouse for the supply the recipient of the good has to generate an e-way bill.

In the second case, when the goods are transported to the factories or business for consumption then it is mandatory for the recipient factory or business generate an e-way bill.

Export procedures

Export and Import under GST

There are two stages that are involved in the export procedure. Let us see what are they

Stage 1:  In this stage the goods are transported from the exporter’s warehouses or the location of business to the CFS or ICD. For the transportation purpose, the exporter has to generate an e-way bill

Stage 2:  The goods so transported from the exporter to CFS or ICD is transferred to the port or airport. This transfer of good is exempted from the provision of generation of an e-way bill.

Moreover, there are some goods that are exempted from carrying an e-way bill even for exports and imports. Some of them are

•   Diesel, petrol, kerosene, lubricant oil for any Indian aircraft etc.

•   Paper money.

•   Wool, woollen cloth received as a gift from the red cross society.

•   Goods imported by the diplomats or their families for consumption.

•   Goods imported in India for fair or exhibition that shall be re-exported within six months from the date of receiving that good.

•   Goods transported to or from Nepal or Bhutan.

The list includes more items.

How to generate an e-way bill for imports and exports?

In exports and imports, the portal and procedure remain similar for the generation of an e-way bill.

But there are some points that shall be kept in mind while furnishing the details in an e-way bill in case of import and exports.

Particulars in the e-way billIn case of ImportIn case of Export
Sub-types of transactionThe taxpayer shall enter Import.The taxpayer shall enter Export.
Type of documentBill of entry shall be used to furnish this detail.Invoice of tax generated for export of goods shall be used to furnish the details.
Bill FromIf the bill is from the unregistered Person.Exporter’s details including the name, GSTIN
Dispatch FromIn state line ‘other countries’ shall be selected and Pin code 999999 shall be entered.Exporter’s location of business or warehouse address as the case may be.
Bill toImporter's details including the name, GSTIN and other details.If a person outside India is unregistered.
Ship toImporter’s location of business or warehouse address as the case may be.In state line ‘other countries’ to shall be selected and Pin code 999999 shall be entered.
Details of TransportationDetails of transporter which includes vehicle details and transporter's details.Details of transporter which includes vehicle details and transporter's details.

Importance of the e-way bill in exports and imports.

The main area of concentration while generating an e-way in the case of imports and exports is to validate the distance so as to avoid the consequences that can be imposed on the concerned parties.

Import:  The distance and validity of an e-way bill shall be calculated when the goods are transported to the location of business or factory from either CFS/ICD or warehouses.

Export:  The distance and validity of an e-way bill shall be calculated before the transportation of the goods from the location of business to ICD/CFS or warehouses as the case may be.