GST - Export of Goods

[Ethirajan Parthasarathy]

Rule 96A of GST Rules provides that an exporter has to pay the applicable taxes with interest, provided the goods are not exported for more than three months.

Due to logistic issues, goods might not have left the shores and goods are brought back to vendor’s place. Brought back goods may be supplied subsequently locally or may even be exported later. In such a situation what is the idea behind making the exporter to pay IGST for the first transaction which has not materialised.

For export of services, there is a condition that the exporter has to pay the tax with interest, if sale proceeds are not realised within the time allowed. It is not clear why no such condition is prescribed for export of goods.

Rule 96A of GST Rules provides that an exporter has to pay the applicable taxes with interest, provided the goods are not exported for more than three months.

Due to logistic issues, goods might not have left the shores and goods are brought back to vendor’s place. Brought back goods may be supplied subsequently locally or may even be exported later. In such a situation what is the idea behind making the exporter to pay IGST for the first transaction which has not materialised.

For export of services, there is a condition that the exporter has to pay the tax with interest, if sale proceeds are not realised within the time allowed. It is not clear why no such condition is prescribed for export of goods.

AI Summary

Query on Rule 96A: Why must exporters pay IGST if goods aren't exported within three months? An anonymous user raised a query regarding Rule 96A of GST Rules, which mandates that exporters must pay applicable taxes with interest if goods are not exported within three months. Due to logistical issues, goods may return to the vendor and be supplied locally or exported later. The user questioned the rationale behind paying IGST for unmaterialized transactions and noted the absence of a similar condition for goods as exists for services. In response, one participant emphasized legislative wisdom and suggested representation, while another advised following the 'Back to Town' procedure.