Sale against EPCG and invalidation letter

[Manish Sulakshane]

Dear Sir

We are manufacturer of Finned Tube Heat exchangers used in Refrigeration and Air conditioning Industries.

The sale of our Products attracts GST @28 % earlier and as per the recent Council meets held at Gauhati last week, it has been reduced to 18%.

One of our Customer who wishes to buy the Units from us has informed that they would be submitting us EPCG license along with invalidation letter and accordingly the material is to be to be considered at Deemed export and GST charges to be NIL.

Can you please clarify whether GST is applicable on sale against EPCG and invalidation letter.

[CSSANJAY MALHOTRA]

GST is applicable and supplies can;'t be cleared at NIL rate of duty. Refund is eligible to one of the party.

[DR.MARIAPPAN GOVINDARAJAN]

GST is applicable.

[Nash Industries I Pvt Ltd]

There is no abnitio exemption under GST. GST is payable on supplies termed as Deemed Export. The refund of the tax is available to one - supplier or the recipient. The effect of the refund of the tax is neutralisation of the tax either as ITC or as refund.

Regards

S.Ramaswamy

AI Summary

GST applicability on supplies against EPCG: tax must be charged, with refund relief available to supplier or recipient.
GST is payable on supplies made against an EPCG licence with an invalidation letter; such supplies cannot be cleared at a nil rate. Refund of tax on supplies treated as Deemed Export is available to either the supplier or the recipient, and operates to neutralise the tax burden through Input Tax Credit restoration or direct refund, meaning tax should be charged at invoicing and relief pursued subsequently via the refund mechanism.