Export of Goods with payment of Tax

[RAMNIRANJAN KANDOI]

Facts of the Case:

Party A exports material with payment of Tax.

The GST Tax Invoice is prepared where Tax is paid on material only.

Freight Value is shown in the Invoice but tax on freight is not calculated and paid..

The Export is made under CIF value.

In Commercial Invoice, a break up is given as under

Material Valu

Freight Valu

Total Amt

Buyer has made full payment i.e. of material and freight.

In shipping bill break up is shown as FOB Value and Freight Value Since GST was not paid on freight hence refund received to the extent of Tax paid i.e. on the material exported.

Query

1) Is the above process correct

2) If GST is to be paid on freight then will one get auto refund of the tax paid on freight

3) Now if Party A decides to pay tax with interest for prior period for the freight shown on Invoice then will the party get refund of tax? If yes what would be the process

4) Is there any way of paying Tax on freight and take ITC on the same?

AI Summary

Clarification Sought on GST Applicability for Freight in CIF Exports; Issues with IGST Declarations and Refunds Party A exports goods with tax payment, showing freight value on invoices but not calculating GST on it. The export is under CIF terms, and the shipping bill shows FOB and freight values separately. The query seeks clarity on whether this process is correct, if GST should be paid on freight, and if refunds are possible for previously unpaid freight tax. Responses indicate that FOB value is used for refunds, and there is confusion about declaring IGST values in shipping bills. The discussion explores the differences between invoice and shipping bill values, emphasizing the need for clarity on IGST value declarations for refunds.