GST rate on feed Supplement to be exported under IGST

[Navid Mukadam]

Dear team

we are exporters of veterinary products and as of 8th oct, 2024 Rule 96 (10) was removed, which was restraining exporters to claim refund for IGST paid so we have now shifted to raising of invoices as exports under payment of IGST. we are required to charge Freight & insurance as per the shipment and since we are not into freight business then tax rate applicable on principal supply shall be applicable on Freight & Insurance while raising Tax invoice under GST (according to composite supply definition)

my concern is we have certain products which are feed supplement and as per HSN code under GST which is 2309, tax rate on such invoice is Nil and consequently there is no the need of charging GST on Freight & Insurance (if we go by composite supply defn). Only exchange rate should be taken into account while booking invoice in system.

kindly clarify.

interpretaion from experts will be appreciated

[Shilpi Jain]

For a product which is exempt, any related freight and insurance also no GST will apply.

[Shilpi Jain]

For exports that are GST exempt you should do export under LUT and claim refund.

[Navid Mukadam]

Means only exchange rate will apply while booking sale invoice in system but on Tax invoice & commercial invoice Export under IGST need to mentioned. Right, Ms. Shilpa? 

[Ganeshan Kalyani]

No GST on freight and insurance when the main product is exempt. 

[Shilpi Jain]

In commercial invoice you can avoid IGST. Only tax invoice needs to have IGST

AI Summary

GST exemption on exported principal supply: related freight and insurance are not taxable; use LUT and reflect exchange rate. When the principal exported product is GST-exempt, related freight and insurance are not subject to GST and should follow the tax treatment of the principal supply; exporters of exempt goods should utilise the LUT mechanism and reflect only the exchange rate for system booking, while tax invoices may record required procedural references and commercial invoices need not show IGST.