Is GST Payable on difference between FOB value and CIF Value of Exports

[umeshkumar jhawar]

Dear Experts

Our GST Audit has been condutected and in as per one of para officer has asked to pay GST on difference between FOB value and CIF Value of Exports.

We hvae booked Export in our books of Accounts at CIF value say Rs. 100000.00 and its FOB value as per ICEgate is Rs. 85000.00 , here officer is asking to pay GST on Rs. 15000.00 as same is not under Export giving reference to Refund Circular as issued by department.

[Amit Agrawal]

I am not sure if I understood the entire factual position.

Whether the underlying exports were made after payment of IGST and refund claimed there-against OR Whether the underlying exports were made without payment of IGST and refund claimed against ITC accumulated due to export OR there is something else?

Can you please also explain which Para and circular reference No., which is quoted by Dept officer?

What I am trying to understand the legal basis (if any) & the context of objection raised on which Dept. officer is asking you to pay GST on the difference between FOB & CIF value. Because, I do not find any legal reason to back such demand.

These are ex facie views of mine and the same should not be construed as professional advice / suggestion.

[Charu Tyagi]

Agree with Amit Sir,

There's no such provision under GST as well as Customs Act for payment of GST on difference of FOB & CIF value, need more elaboration of the query or the circular mentioned by deptt.

[KASTURI SETHI]

The difference between CIF value and FOB value has been worked our forcibly. The CIF value of export consignment is up to the destination outside the country and is charged by the exporter from the importer (outside country). How such value is not part of export ?

I think that the objection is all verbal so far. No substance in the objection and I presume that no audit report or SCN or letter has been issued. If any letter or notice has been issued, circular no. must have been mentioned therein.

Hence not taxable.

[Shilpi Jain]

Baseless allegation by officer. No logic. What is the supply that he is looking to tax.

These officers sometimes don't know practical aspects and merely looking at taxing any and every difference on reconciliation!!

AI Summary

Export valuation: GST not payable on CIF FOB difference as CIF constitutes the export consideration.
The experts conclude there is no statutory basis under GST or Customs law to tax the difference between FOB and CIF export values; CIF constitutes the exporter's price to the destination and is part of export consideration, and any audit objection must be supported by a specific circular or notice to be sustainable.