What is Drawback and TED on deemed exports under GST?

A short idea about drawback on deemed exports below GST regime, TED refund towards deemed exports under GST are explained here.

According to The GST regulation, the following provisions would observe under the GST regime for the deemed exports in terms of the refund of the Terminal Excise duty (TED) and drawback (DBK).

No TED refund would be available in the central excise duty is subsumed under GST.

but, for the items included under schedule 4 of central Excise Act, 1944, the TED refund would be available, provided the items are eligible for supply under the said category of the deemed exports under chapter 7 of the FTP, and there is no exemption from payment of excise duty.

Introduction of Deemed Exports

Deemed Exports is refers to supplies of goods manufactured in India (not services) which are notified as deemed exports under the Section 147 of the CGST/SGST Act, 2017. The supplies do not leave India. The payment for such supplies is received either in Indian rupees or in the convertible foreign exchange.

Deemed exports are not zero rated supplies by default, unlike the regular exports. Hence all supplies notified as supply for the deemed export will be subject to levy of taxes Example: such supplies can be made on payment of tax and cannot be supplied under a Bond/LUT.

However, the refund of tax paid on the supply regarded as Deemed export is admissible to either the supplier or the recipient. The application for refund has to be filed by the supplier or recipient (subject to certain conditions) of deemed export supplies, as the case may be.

Also Read: What is Refund of Interest under GST

What is Outbound logistics?

What is Outbound logistics?

Outbound logistics is the process of storing, collection and distribution of the goods to customers. The outbound logistics process start with a customer sales order, moves on to the warehouse packing and finishes with product delivery. The manner related to the motion and storage of merchandise from the quit of the production line to the end user. Outbound logistics refers specially to the making plans and implementation of the distribution of products to a business client or customer.

Focal Distribution is the logistic solution for outbound cargo dispatched from the significant Campus. Focal Distribution will assist with selecting a carrier and arranging for pick-up of materials being delivered off grounds by means of fundamental transporter. Outbound logistics performs a important function in a dealer’s universal client relationship management method. efficient outbound logistic control can reduce shipping charges and growth productivity.

Process of Outbound logistics

A business goes via numerous stages inside the outbound logistics method. The income branch first receives a buy order from the purchaser. The income department assessments stock availability to make sure they are able to fulfill the order.

The sales department then sends the client order to the warehouse for picking and packing. The order is shipped and a warehouse clerk updates stock levels. The commercial enterprise payments the customer and ultimately collects cash for the order.

The sales department then sends the customer order to the warehouse for choosing and packing. The order is shipped and a warehouse clerk updates stock levels. The business payments the purchaser and sooner or later collects cash for the order.

Distribution Channel

In lieu of working immediately with the client, many agencies use channels of distribution. The channels of distribution are the companies and individuals that supply a products or services to the final person. for instance, a enterprise that manufactures prepackaged food may additionally have a ramification of supermarkets and grocery stores in its channels of distribution.

The channel of distribution shops the product, promotes the product and arranges for its sale. part of outbound logistics is choosing channels with a view to maximize revenue. this indicates selecting distributors that sell the product in step with branding, have appropriate logistics systems themselves and cater to the right type of purchaser.

Stock Systems

So that you can make the outbound procedure run easily, agencies have to have a functioning stock gadget. If a business overstocks stock, products may grow to be antiquated or obsolete. If a commercial enterprise would not inventory sufficient inventory, it runs the threat of dropping customers.

groups can use past information to assignment destiny demand and stay in contact with vendors approximately destiny wishes. groups can use a “just in time” stock device in which they manufacture and order materials and merchandise simply in time for shipping to clients.

Delivery Optimization

An important thing of outbound logistics is optimizing delivery and shipping. A machine of barcode scanning and inventory tracking allows the business to constantly update the purchaser at the status of the order. The enterprise usually has a spread of delivery options to pick from, such as a way to deliver the product itself. organizations should pick the shipping choice this is fee efficient, guarantees the goods aren’t damaged in transit and can supply in the allocated time frame.

What is Refund of Interest under GST – All You Need To Know

What is Refund of Interest under GST are explained here.

GST Refund of Interest:

Refund includes refund of tax paid on zero-rated supplies of goods or services or both or on inputs or input services used in making such zero-rated supplies, or refund of tax on the supply of goods regarded as deemed exports, or refund of unutilised input tax credit due to a higher tax rate on the input than the output.

Assessment

“Assessment” means determination of tax liability under this Act and includes self-assessment, re-assessment, provisional assessment, summary assessment and best judgment assessment.

Interest on Refund

Once an application for the refund is filed, a proper officer after inspecting the same, may issue an order if he is satisfied with the whole or partial refund amount claimed. If the refund is not provided within 60 days of the order by the proper officer then the refund shall be provided with an interest at the rate of 6%.

Exception: If refund from an order/direction from the appellate authority/tribunal/court is granted then interest on refund cannot exceed 9%.

Refunds under GST:

The refunds under Central excise and service tax laws take long time. However, in GST Regime, refunds are expected to be processed faster with 90% of the total refund amount being available on submission of proper documents.

Refund of Tax

(1) Any person claiming refund of any tax and interest, if any, paid on such tax or any other amount paid by him, may make an application before the expiry of two years from the relevant date in such form and manner as may be prescribed:

Provided that a registered person, claiming refund of any balance in the electronic cash ledger in accordance with the provisions of sub-section (6) of section 49, may claim such refund in the return furnished under section 39 in such manner as may be prescribed.

(2) A specialised agency of the United Nations Organisation or any Multilateral Financial Institution and Organisation notified under the United Nations (Privileges and Immunities) Act, 1947 (46 of 1947), Consulate or Embassy of foreign countries or any other person or class of persons, as notified under section 55, entitled to a refund of tax paid by it on inward supplies of goods or services or both, may make an application for such refund, in such form and manner as may be prescribed, before the expiry of six months from the last day of the quarter in which such supply was received.

(3) Subject to the provisions of sub-section (10), a registered person may claim refund of any unutilised input tax credit at the end of any tax period:

Provided that no refund of unutilised input tax credit shall be allowed in cases other than–

  1. zero rated supplies made without payment of tax;
  2. where the credit has accumulated on account of rate of tax on inputs being higher than the rate of tax on output supplies (other than nil rated or fully exempt supplies), except supplies of goods or services or both as may be notified by the Government on the recommendations of the Council:

Provided further that no refund of unutilised input tax credit shall be allowed in cases where the goods exported out of India are subjected to export duty:

Provided also that no refund of input tax credit shall be allowed, if the supplier of goods or services or both avails of drawback in respect of central tax or claims refund of the integrated tax paid on such supplies.

(4) The application shall be accompanied by–

(a) such documentary evidence as may be prescribed to establish that a refund is due to the applicant; and

(b) such documentary or other evidence (including the documents referred to in section 33) as the applicant may furnish to establish that the amount of tax and interest, if any, paid on such tax or any other amount paid in relation to which such refund is claimed was collected from, or paid by, him and the incidence of such tax and interest had not been passed on to any other person:

Provided that where the amount claimed as refund is less than two lakh rupees, it shall not be necessary for the applicant to furnish any documentary and other evidences but he may file a declaration, based on the documentary or other evidences available with him, certifying that the incidence of such tax and interest had not been passed on to any other person.

(5) If, on receipt of any such application, the proper officer is satisfied that the whole or part of the amount claimed as refund is refundable, he may make an order accordingly and the amount so determined shall be credited to the Fund referred to in section 57.

(6) Notwithstanding anything contained in sub-section (5), the proper officer may, in the case of any claim for refund on account of zero-rated supply of goods or services or both made by registered persons, other than such category of registered persons as may be notified by the Government on the recommendations of the Council, refund on a provisional basis, ninety per cent. of the total amount so claimed, excluding the amount of input tax credit provisionally accepted, in such manner and subject to such conditions, limitations and safeguards as may be prescribed and thereafter make an order under sub-section (5) for final settlement of the refund claim after due verification of documents furnished by the applicant.

(7) The proper officer shall issue the order under sub-section (5) within sixty days from the date of receipt of application complete in all respects.

(8) Notwithstanding anything contained in sub-section (5), the refundable amount shall, instead of being credited to the Fund, be paid to the applicant, if such amount is relatable to–

(a) refund of tax paid on 1[export] of goods or services or both or on inputs or input services used in making such 1[exports];

(b) refund of unutilised input tax credit under sub-section (3);

(c) refund of tax paid on a supply which is not provided, either wholly or partially, and for which invoice has not been issued, or where a refund voucher has been issued;

(d) refund of tax in pursuance of section 77;

(e) the tax and interest, if any, or any other amount paid by the applicant, if he had not passed on the incidence of such tax and interest to any other person; or

(f) the tax or interest borne by such other class of applicants as the Government may, on the recommendations of the Council, by notification, specify.

2[(8A) The Government may disburse the refund of the State tax in such manner as may be prescribed.]

(9) Notwithstanding anything to the contrary contained in any judgment, decree, order or direction of the Appellate Tribunal or any court or in any other provisions of this Act or the rules made thereunder or in any other law for the time being in force, no refund shall be made except in accordance with the provisions of sub-section (8).

(10) Where any refund is due under sub-section (3) to a registered person who has defaulted in furnishing any return or who is required to pay any tax, interest or penalty, which has not been stayed by any court, Tribunal or Appellate Authority by the specified date, the proper officer may–

(a) withhold payment of refund due until the said person has furnished the return or paid the tax, interest or penalty, as the case may be;

(b) deduct from the refund due, any tax, interest, penalty, fee or any other amount which the taxable person is liable to pay but which remains unpaid under this Act or under the existing law.

Explanation.–For the purposes of this sub-section, the expression “specified date” shall mean the last date for filing an appeal under this Act.

(11) Where an order giving rise to a refund is the subject matter of an appeal or further proceedings or where any other proceedings under this Act is pending and the Commissioner is of the opinion that grant of such refund is likely to adversely affect the revenue in the said appeal or other proceedings on account of malfeasance or fraud committed, he may, after giving the taxable person an opportunity of being heard, withhold the refund till such time as he may determine.

(12) Where a refund is withheld under sub-section (11), the taxable person shall, notwithstanding anything contained in section 56, be entitled to interest at such rate not exceeding six per cent. as may be notified on the recommendations of the Council, if as a result of the appeal or further proceedings he becomes entitled to refund.

(13) Notwithstanding anything to the contrary contained in this section, the amount of advance tax deposited by a casual taxable person or a non-resident taxable person under sub-section (2) of section 27, shall not be refunded unless such person has, in respect of the entire period for which the certificate of registration granted to him had remained in force, furnished all the returns required under section 39.

(14) Notwithstanding anything contained in this section, no refund under sub-section (5) or sub-section (6) shall be paid to an applicant, if the amount is less than one thousand rupees.