The Central Board of Indirect Taxes and Customs (CBIC) dated September 30, 2023, has provided the Circular No. 24/2023-Customs, informing the circular about the implementation of Section 16(4) of the Integrated Goods and Services Tax (IGST) Act. This circular pertains to restrictions on the export of specific goods with IGST payment obligations and their inclusion in the refund mechanism.
Referring to subsection (4) of section 16 of IGST Act 2017 and Notification No. 01/2023-Integrated Tax dated 31.08.2023, vide Notification No. 27/2023-Central Tax dated 31.07.2023, Section 16(4) of IGST Act, 2017 will come into force from 01.10.2023.
Regarding the aforesaid provision, vide Notification no. 01/2023-Integrated Tax on 31.08.2023, It has been made known that any goods or services (apart from those listed in column (3) of the TABLE in the notification) may be exported with the payment of integrated tax, with the provider of those goods or services having the right to demand a refund of the tax that was paid.
In actuality, only LUT may be used for the export of the goods listed in the Table annexe to the aforementioned announcement.
In order to uphold the previously mentioned restrictions pertaining to the exportation of goods or services with IGST payment obligations, DG Systems CBIC has implemented a backend feature. This feature is designed to prevent IGST refunds for specific goods as outlined in the notification.
Consequently, adjustments have been incorporated into the shipping bill filing process and its subsequent amendments for these designated commodities. These checks are now operational at the shipping bill level since IGST refunds are handled during that phase.
It is important to emphasize that in situations where a shipping bill includes one or more invoices with IGST payments, even if a single invoice contains an item restricted for export under IGST payment as per section 16(4) of the IGST Act, the submission of such shipping bills will not be permitted.
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Given the aforementioned circumstances, it is been requested that the responsible officers within your jurisdiction be made aware of this matter, particularly in the case of manual Shipping Bills at non-EDI ports or even at EDI ports, and for exports via postal services or courier.
The objective is to ensure that the export of these notified goods with IGST payment is not allowed, thus preventing any undue advantages from being obtained through the export of such notified goods in compliance with the provisions of section 16(4) of the IGST Act 2017.
For the same concern the department urges the appropriate trade notice/ public notices might be provided to sensitize the trade for it. If there are any issues in the execution of the same circular might be drawn to the notice of the Board on email id- dircus@nic.in.