TaxTMI 
TaxTMI 
2023 (6) TMI 1295
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....- (i) Whether Duty Credit Scrips issued under RoSCTL scheme issued by Directorate General of Foreign Trade is taxable or exempt under GST schedule I, SI. No.-122A HSN code 4907? (ii) Whether Notification No. 35/2017-Central Tax (Rate) dated 13th October 2017 is applicable to all duty credit scrips or not?" 4. As per declaration given by the applicant in Form ARA-01, the issue raised by the applicant is neither pending nor decided in any proceedings under any of the provisions of the Act, against the applicant. The applicant has submitted that- (a) It is a firm engaged in buying and selling of "Duty Credit Scrips". For this purpose it is holder of IEC code issued by Government of India, Ministry of Commerce and Industry. (b) Advance ruling is being sought upon taxability of duty credit scrips issued under RoSCTL scheme issued by Directorate General of Foreign Trade. Notification No. 35/2017-Central Tax (Rate) dated 13th October 2017 has been issued by the Ministry of Finance through which entry no. 122-A has been inserted which clearly exempts the duty credit scrips under HSN Code 4907. (c) Clarification is being sought whether duty....
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.... their tax liabilities. It can be used against tax liabilities arising out of Basic Custom Duty, Additional Customs Duty, Safeguard Duty, Transitional Specific Safeguard Duty, and Anti-dumping Duty. DCS can be transferred to others, but it cannot be used to set off GST, Compensation cess and Education Cess. • From the date of issue, a DCS remain valid for 24 months. But the benefits don't need to cease after two years. • If the exporter does not have a foreseeable use of the DCS within the validity period, they can always transfer it to another person who can use it against their own outstanding tax liability. • Additionally, the DGFT can also revalidate a DCS if the exporter submits a special request under exigent circumstances. It is clear that the duty credit scrips are the instruments to award incentives to the exporters with the objective of the export promotion by allowing them to set off the Basic Customs Duty against it. It is also to be noted that the duty credit scrips are not allowed to set off the IGST, CGST/SGST liability. (4) That is why a frequently asked question (FAQ) in this regard has been issued by Custom's "I....
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....r rules, in which the jurisdiction of Customs Duty and its use, transfer is vested. It is exempted from tax vide Notification No. 35/2017-C.T.(Rate) dated 13-10-2017 under serial number 122A. "DFIA" Duty Free Import Authorization in the case in question in which the duty is vested. The important portions are as under:- 4.4 The Appellant also referred to the CBEC Circular issued vide letter dated 06-06-2018 has clarified the GST rate applicable on Priority Sector Lending Certificate (PSLC), Renewable Energy Certificate (REC) and other similar scrips. The relevant para 6 and 7 are reproduced below:- ......................... 6. As such, various certificate likes REC, PSLC, etc. are classified under heading 4907 and will accordingly attract GST @ 12%, through duty paying scrips classifiable under the same heading will attract Nil GST (under Sr. 122-A of the Notification No. 2/2017-central Tax (Rate) dated 28-06-2017, as amended vide Notification No. 35/2017 dated 13-10-2017. 7. Accordingly, in modification of Sr. No. 3 of Circular No. 34/08/2018-GST dated 01-03-2018, hereby clarified that renewable energy certificate (REC) and Priority Sector Lending Cert....
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....Kanpur-II, Uttar Pradesh vide his letter dated 01.08.2022 submitted that Circular No. 46/20/2018-GST dated 06-06-2018 para 6 clearly said that PSLCS, RECS and other similar scrips are classified under heading 4907 and will accordingly attract GST @ 12% on duty paying scrips classifiable under the same heading will attract Nil GST (under S.No. 122A of Notification No. 2/2017-Central Tax (Rate) dated 28.06.2017, as amended vide Notification No. 35/2017-Central Tax (Rate) dated 13.10.2017). The ROSTCL is "not duty paying scrips it is only a pass" so not same as MEIS, SEIS (Duty Credit Scrips). 5.1 The Assistant Commissioner, CGST, Central Excise Div. III, Kanpur, vide his letter C.No. GEXCOM/Tech/2337/2022-Tech-CGST-Divill-KNPR-Comm/53 dated: 09.09.2022 submitted the following: The Duty Credit Scrips was taxable w.e.f. 01.07.2017 to 13.10.2017 i.e. before the insertion of Sl.No. 122A in the Schedule under HSN-4907: Duty Credit Scrips. It is to mention that no nomenclature was provided by the party. The Rebate of State and Central Taxes and Levies (ROSCTL) Scheme is a new scheme introduced by the Ministry of Commerce. Currently, it appears that ROSCTL scheme is only valid for ....
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....he powers conferred by sub-section (1) of section 11 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council, hereby exempts intra-State supplies of goods, the description of which is specified in column (3) of the Schedule appended to this Notification, falling under the tariff item, subheading, heading or Chapter, as the case may be, as specified in the corresponding entry in column (2) of the said Schedule, from the whole of the central tax leviable thereon under section 9 of the Central Good and Services Tax Act, 2017 (12 of 2017). Schedule 2. This Notification shall come into force with effect from the 1st day of July, 2017. [F.No. 354/117/2017-TR U] (Mohit Tewari) Under Secretary to the Government of India In view of the above, the issue raised by the applicant is in affirmative i.e. -Duty Credit Scrips (Specific entry) issued under ROSCTL issued by the Directorate General of Foreign Trade is exempted. The corresponding entry was also Inserted vide Notification No. 36/2017-Integrated Tax (Rate) dated 13.10.2017. Questio....
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.... Note: The principal notification No. 1/2017-Central Tax (Rate), dated the 28th June, 2017, was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 673(E), dated the 28thJune, 2017, and was last amended by notification No. 01/2021 - Central Tax (Rate), dated the 2nd June, 2021, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub- section (i) vide number G.S.R. 374(E), dated the 2nd June, 2021. Earlier it was in the Schedule II, having GST rate of 12% (S.No. 128 of Schedule II-NN 01/2017-Central Tax (Rate) dated 28.06.2017. 6. The applicant was granted a personal hearing on 14.09.2022 which was attended by Mr. Santosh Kumar Gupta and Mr. Shubham Agarwal, Advocate, Authorized Representatives during which they reiterated the submissions made in the application of advance ruling. DISCUSSION AND FINDING 7. At the outset, we would like to make it clear that the provisions of both the CGST Act and the UPGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference t....
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....lectricity, stamp duty on export documents, embedded SGST paid on inputs such as pesticides, fertilizers etc. used in production of raw cotton, purchases from unregistered dealers, coal used in production of electricity and inputs for transport sector. • Rebate of Central Taxes and Levies comprises of central excise duty on fuel used in transportation, embedded CGST paid on inputs such as pesticides, fertilizer etc. used in production of raw cotton, purchases from unregistered dealers, inputs for transport sector and embedded CGST and Compensation Cess on coal used in production of electricity. • The sectors covered under this scheme (apparel/garments and made-ups) would not get benefits under the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme. However, textiles products which are not covered under the RoSCTL would be eligible to avail the benefits, if any, under RoDTEP along with other products as finalised by the Department of Commerce. 9.2 EXTENSION OF RoSCTL SCHEME Vide notification No. 14/26/2016-IT (Vol.II) dated 07.03.2019, the Ministry of Textiles notified the RoSCTL Scheme for Rebate of State and Central Taxes and Levies ....
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....ups (goods falling under Chapter 63 of the Schedule of All Industry Rates (AIR) of drawback excluding tariff items 6308, 6309, 6310 and goods in tariff items 9404 that are excluded from drawback tariff item 6304), in accordance with the recognized international economic principle of zero rating of export products at the rates notified vide Notification No 14/26/2016-IT (Vol.II) dated 08.03.2019 with value caps. The Rebate of State Taxes and Levies shall be understood to comprise VAT on fuel used in transportation, captive power, farm sector, mandi tax, duty of electricity, stamp duty on export documents, embedded SGST paid on inputs such as pesticides, fertilizers etc. used in production of raw cotton, purchases from unregistered dealers, coal used in production of electricity and inputs for transport sector. The Rebate of Central Taxes and Levies shall be understood to comprise central excise duty on fuel used in transportation, embedded CGST paid on inputs such as pesticides, fertilizer etc. used in production of raw cotton, purchases from unregistered dealers, inputs for transport sector and embedded CGST and Compensation Cess on coal used in production of electricity 9....
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....ification. It is observed that the definition or meaning of the Duty Credit Scrips is not provided under the GST law. Therefore, we will resort to the Foreign Trade Policy (FTP) 2015- 20 formulated by the DGFT, from where this term 'Duty Credit Scrips' has emerged and conceptualized. The relevant portion of Notification No. 02/2017-C.T. (Rate) dated 28.06.2017 is reproduced as under: [TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)] GOVERNMENT OF INDIA MINISTRY OF FINANCE (Department of Revenue) Notification No. 35/2017-Central Tax (Rate) New Delhi, the 13th October, 2017 G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 11 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 2/2017-Central Tax (Rate), dated the 28th June, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 674(E), dated the 28....
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....roduced as a replacement of previous Rebate of State Levies (RoSL) Scheme which provided only rebates of state taxes. Vide aforesaid notification dated 07.03.2019, the RoSCTL Scheme were made effective from the date of Notification i.e. w.e.f. 07.03.2019 with an expiry date of 31.03.2020 which has now been extended up to 31.03.2024 vide para 2 of notification issued by Ministry of Textiles dated 13th August 2021. • Prior to introduction of the RoSCTL scheme, the Apparel and made-ups sectors were supported under the Scheme for Rebate of State Levies (RoSL) for apparel, notified vide notification no. 12020/03/2016-IT dated 12.08.2016 and for made-ups, notified vide Notification No. 12015/47/2016-IT dated 03.01.2017. However, certain State as well as Central taxes continued to be present in the cost of exports. Accordingly, in pursuance of the decision of the Government of India to rebate all embedded State and Central Taxes and Levies on garments and made-ups to enhance competitiveness of these sectors, the RoSCTL Scheme was notified by the Ministry of Textiles and the existing RoSL Scheme was discontinued w.e.f. from 07.03.2019. In the above context, Para 3 of notifi....
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.... mechanism, with an Information Technology based Risk Management System (RMS), in place. 9. Duration of the Scheme RoSCTL Scheme for apparel/garments and made-ups shall be continued w.e.f 01st January 2021 till 31.03.2024. 14 Question No. 22 on Page No. 472 issued by CBIC GOODS AND SERVICES TAX (GST) 3rd Edition: dated 15th December, 2018 is as under: Q 22. What is the rate of duty on sale of MEIS/SEIS scrips? Ans. The MEIS/SEIS scrips are classifiable under HSN code 4907 and the sale of such scrips is exempted vide S. No. 122A of Notification No. 2/2017-Central Tax (Rate) dated 28.06.2017, as amended vide Notification No. 35/2017- Central Tax (Rate) dated 13.10.2017. 15. Para 3 of Circular No. 10/2019-Customs dated 12th March, 2019 issued vide F.No.605/7/2019-DBK is as under: It is to point out that under the RoSCTL, the benefit to exporters shall be given by DGFT in form of Merchandise Exports from India Scheme (MEIS) type duty credit scrips. Detailed procedure for claiming benefit under the RoSCTL, issuance of scrips and their usage is being worked out. Till finalisation of such details, in the transition period, it has been decided that....