It is essential for novice exporters to comply with all the rules and regulations set by the Government of India. Exporters have to submit the GST registration documents required for availing a GST number mandatory before beginning operations. The identification number is necessary, especially when the products being shipped are taxable.
The implementation of GST has somewhat increased the compliance for exporters. Failure to follow these rules may bring several complications and be subject to penal offences. However, abiding by these regulations will help them to avail the GST benefits.
Hence, you need to adhere to all the GST regulations when exporting goods by keeping in mind the following points:
1. Registration for GST
Exporters with annual revenue of more than Rs. 20 Lakh have to register for GST compulsorily. They will avail the GSTIN after a successful registration.
Exporting goods is considered as an inter-state movement of goods. Hence, exporters have to register themselves to obtain a GST Identification Number.
2. Filing of shipping bill
The shipping bill is a document that acts a clearance form for the exporter from the customs department. Shipping bills are digital and you are not required to submit a hardcopy for approval. It contains the tax amount and taxable value of each good mentioned in it.
You have to register with Indian Customs Electronic commerce Gateway or ICEGATE. AN ICEGATE ID is necessary for filling shipping bills. These must include your GST Identification Number, IEC code, and PAN or UIN.
The shipping bill is necessary for the claiming input tax credit on inputs consumed in exported goods refund of IGST (Integrated Goods & Services Tax).
3. Availing Import Export Code (IEC)
The Import Export Code (IEC) is another mandatory number required for conducting exports unless specified otherwise. The Directorate General of Foreign Trade under the Ministry of Commerce and Industry provides the IEC code to exporters.
You have to provide various documents to avail an IEC code similar to the GST registration documents required. Some of these include bank account details, banker’s certificate, PAN, and letterhead or covering letter of your company.
4. Availing Registration-Cum-Membership Certificate (RCMC)
The Registration-Cum-Membership Certificate (RCMC) provided by the Export Promotion Council is necessary for exporting or importing restricted items or availing concessions and benefits under the Foreign Trade Policy.
An RCMC is valid for 5 years, and you have to provide almost all GST registration documents required to avail an IEC code. These include PAN, business registration document (MOA, Partnership Deed, Trust’s Deed, RoC certificate, etc.), service export data, and GST registration certificate to avail it.
5. Filing of letter of undertaking (LUT)
A letter of undertaking is mandatorily required if you are exporting goods without paying IGST. The LUT is valid for one financial year.
You have to provide an export bond or pay IGST in case you don’t hold a LUT. Export bond and payment of IGST is mandatory for those who have evaded tax of more than Rs. 2.5 Crore or undergone prosecution.
6. Filing of GST
Exporters have to provide all the GST registration documents required for registration and file returns correctly by filing GSTR-1 and GSTR-3B.
Filing of GST is also necessary if you seek to avail a business loan in the future. NBFCs like Bajaj Finserv provide Business Loans of up to Rs. 30 Lakh with tenors up to 60 months.
7. Availing duty credit scrip
The DGFT issues duty credit scrip to exporters under various schemes of the Foreign Trade Policy like SEIS, MEIS, and EPCG. A duty credit scrip is a form of discount that exporters can avail while paying customs duty.
Check the complete guide for GST registration procedure so you don’t face any hassle. And, make sure to comply with all the points mentioned above when exporting.