Claiming of Refund under GST for Custom Duty paid by exporters

[Jasbir Uppal]

Dear professionals

GST has subsumed all the indirect taxes including service tax, excise and VAT. Only the basic customs duty remains out of its gamut. This sweeping change essentially disturbs the current drawback mechanism.

What is the mechanism to adopted by the Government In GST to refund the basic customs duty to exporters in place of duty draw back, because the export is zero rated in GST.

Regards

J.S.Uppal

Tax Consultant

[YAGAY and SUN]

Customs duty would be paid back through AIR DBK or through Brand Rate Fixation. IGST would be paid as refund but if goods were obtained via AA and EPCG then no refund of IGST would be available.

AI Summary

Customs duty refund mechanism clarified: refund via AIR DBK or Brand Rate Fixation; IGST refund excluded for AA and EPCG
Basic customs duty remains outside GST and must be restored to exporters by either AIR DBK or Brand Rate Fixation. IGST on exports is generally refundable, but IGST refund is not available where the goods were sourced under Advance Authorization (AA) or the EPCG scheme.