IMPORTS + EXPORTS + SEZ + ZERO-RATED

C.1 — Import of goods + IGST + Compensation Cess

Facts: Mumbai importer imports luxury SUV from Germany; CIF Rs. 50 lakh; BCD 60%; SWS 10% of BCD; IGST 28%; Compensation Cess 22%.

Computation / Steps:

Step 1. Import per s. 7(2) IGST — inter-State.

Step 2. CIF Rs. 50 lakh + BCD Rs. 30 lakh + SWS Rs. 3 lakh = Rs. 83 lakh.

Step 3. IGST 28% on Rs. 83 lakh = Rs. 23.24 lakh.

Step 4. Compensation Cess (per s. 3(9) Customs Tariff Act) 22% on (Rs. 83 lakh + Rs. 23.24 lakh)... or on customs value depending on cess base — typically on value including BCD = Rs. 83 lakh × 22% = Rs. 18.26 lakh.

Step 5. Total customs duty + GST + Cess = Rs. 74.50 lakh on Rs. 50 lakh CIF (149% effective).

Step 6. Importer takes IGST + Cess credit in electronic credit ledger.

Step 7. Cess credit siloed for cess payment only (s. 11(2) Compensation Act).

Result: Luxury SUV import — IGST + Compensation Cess substantial. Cess credit siloed.

C.2 — Export of services under LUT route

Facts: Bangalore software company exports services Rs. 1 cr to US client annually; LUT filed.

Computation / Steps:

Step 1. Export of services per s. 2(6) IGST — five-limb test satisfied.

Step 2. Zero-rated per s. 16(1)(a).

Step 3. LUT filed under Rule 96A — Form GST RFD-11.

Step 4. No IGST charged on export invoice.

Step 5. Accumulated ITC on inputs/input services refundable under Rule 89.

Step 6. Refund formula: (Zero-rated turnover × Net ITC) ÷ Adjusted Total Turnover.

Step 7. Quarterly refund applications typical.

Result: Export of services under LUT — no IGST + accumulated ITC refundable.

C.3 — Export of goods under IGST-paid route

Facts: Mumbai manufacturer exports textiles Rs. 50 lakh to UK; IGST 12% paid.

Computation / Steps:

Step 1. Export of goods per s. 2(5) — physical removal from India.

Step 2. Zero-rated under s. 16(1)(a).

Step 3. IGST-paid route: pay IGST Rs. 6 lakh on export invoice.

Step 4. Shipping Bill flagged for IGST refund.

Step 5. Customs ICEGATE auto-refund process; typically 30-60 days.

Step 6. Critical: GSTR-1 export reporting (Table 6A) must match Shipping Bill data.

Step 7. Post FA 2021 (effective from notified date) — IGST-paid route restricted to notified class via sub-s. (4) framework.

Result: IGST-paid export — Rs. 6 lakh refunded via auto-refund. Faster cash-flow than LUT for low-ITC exporters.

C.4 — SEZ supply via three operational routes

Facts: Bangalore supplier supplies components Rs. 10 lakh to Visakhapatnam SEZ unit.

Computation / Steps:

Step 1. s. 7(5)(b) — inter-State per IGST; zero-rated under s. 16(1)(b).

Step 2. Route 1: LUT under Rule 96A — no IGST charged; refund of accumulated ITC.

Step 3. Route 2: IGST-paid (Rs. 1.8 lakh) + Rule 96 auto-refund.

Step 4. Route 3: Notification 18/2017-IT(R) exemption — no IGST + no LUT; supplier maintains SEZ endorsement.

Step 5. Choice: depends on SEZ recipient's authorized-operations endorsement + supplier's documentation + cash-flow.

Result: SEZ supplies have three operational routes. Notif 18 simplest if recipient certification available.

C.5 — Merchant exporter 0.1% rate chain (Notif 41/2017-IT(R))

Facts: Garment manufacturer supplies inputs Rs. 1 cr to merchant exporter for export within 90 days.

Computation / Steps:

Step 1. Per Notif 41/2017-IT(R) — concessional 0.1% rate for inputs to merchant exporter.

Step 2. Manufacturer charges 0.1% IGST = Rs. 10,000 (vs 5% standard).

Step 3. Manufacturer absorbs ITC against minimal IGST liability + refund.

Step 4. Merchant exporter exports within 90 days under LUT or IGST-paid.

Step 5. Critical conditions: recipient is merchant exporter; export within 90 days; documentation.

Result: 0.1% concessional rate optimizes working capital in export chain. Garment/textile sector primary beneficiary.

C.6 — Cross-border B2B services (import) — RCM

Facts: Mumbai company receives consulting services Rs. 20 lakh from US firm; payment in USD.

Computation / Steps:

Step 1. Import of services per s. 7(4) IGST — inter-State.

Step 2. POS per s. 13(2) — recipient location (India / Mumbai) since US recipient and supplier outside India... wait actually — s. 13 applies when supplier OR recipient outside India. Supplier in US; recipient in India. POS = recipient location India.

Step 3. Indian recipient is registered — RCM under s. 5(3) IGST.

Step 4. Indian recipient pays IGST 18% = Rs. 3.6 lakh on RCM basis.

Step 5. Self-invoice under Rule 36 CGST.

Step 6. Recipient takes IGST credit in GSTR-3B Table 4(A)(3) — RCM inwards.

Result: Import of services — RCM on Indian recipient under s. 5(3) IGST. Self-invoice + credit framework.

C.7 — High-seas sale + import flow

Facts: Importer A in Mumbai imports from China; high-seas sells to B in Delhi before customs clearance. B clears customs and pays IGST.

Computation / Steps:

Step 1. Pre-clearance A-to-B high-seas sale per s. 7(2) IGST — inter-State.

Step 2. Not separately taxed in GST (taxed only at customs clearance per s. 5(1) proviso).

Step 3. B (final importer) pays IGST on landed value (including A's margin per high-seas sale invoice).

Step 4. Customs Tariff Act s. 3(7) framework operative.

Step 5. B's GSTIN — location of importer per s. 11(a).

Step 6. B takes IGST credit upon clearance.

Result: High-seas sale not separately taxed; final import IGST on landed value including HSS margin.

C.8 — Deemed export under s. 147 CGST + Notif 48/2017-CT

Facts: Indian manufacturer supplies inputs Rs. 50 lakh to Advance Authorisation holder in India.

Computation / Steps:

Step 1. Per Notif 48/2017-CT — Advance Authorisation supply notified as deemed export under s. 147 CGST.

Step 2. Goods don't leave India → NOT export under s. 2(5) IGST.

Step 3. Domestic taxable supply at applicable rate (e.g., 18% CGST + DGST for intra-Delhi).

Step 4. Refund under Notif 49/2017-CT framework — to supplier or recipient as elected.

Step 5. Critical: distinct from s. 2(5) IGST export; different refund mechanism.

Result: Deemed export ≠ physical export. Different refund route under s. 147 CGST framework.