Deemed Export - Invoicing under GST

[Nash Industries I Pvt Ltd]

At present an EOU is allowed to invoice to another EOU in free foreign currency. No ED is charged. However, VAT is leviable if Intra State and CST (reimbursable) if Inter State.

Under the GST regime, the invoice is to be uploaded onto the GSTN. IGST is leviable on Inter State supply of goods from one EOU to another and CGST+SGST if the supply is Intra State (from one EOU to another EOU).

Query: Whether an EOU is allowed to invoice to another EOU (Intra State supplies) charging CGST+SGST in free foreign currency.

Neither SEZ authorities nor the CE/ Customs have any clarity on the matter. Even RBI says it is a transactional matter and the authorised dealer (banker) needs to reply.

May I have the views of the other experts on the matter as these will create havoc on the first day of GST regime for many EOU (irrespective of the industry).

Thank you

With Regards

S.Ramaswamy

[JAIPRAKASH RUIA]

Dear Sir,

Very good query. I just want to share my comments.

Some of the draft rules are issued related to GST but Rules related to EOU or we can say FTP (Foreign Trade Policy) not yet issued. So waiting for the Rules followed by Notifications in this regard is the only options and that seems the reason that various experts are supporting the roll out date of 01.09.2017.

AI Summary

EOU invoicing under GST raises ambiguity over charging CGST and SGST for intra state foreign currency supplies. Supplies between EOUs must be uploaded to the GSTN and attract IGST if inter state or CGST+SGST if intra state; uncertainty exists whether an EOU may invoice another EOU in free foreign currency while charging CGST and SGST because specific GST rules incorporating EOU/FTP treatment and related notifications have not yet been issued, leaving administrative and banking authorities without clear guidance.