Self Sealing of Containers to Exporters Allowed Subject to One Time Permission
[CBEC Circular No. 26 dated 1st
July 2017]
Subject: Export procedure and sealing
of containerized cargo.
Goods and Service Tax has become operational
from 01-07-2017. In the GST regime, the governing provisions related to exports
are contained in section 16 of the Integrated Goods and Service Tax Act, 2017
(IGST Act). Supplies of goods and services for exports have been categorized as
'Zero Rated Supply' implying that goods could be exported under bond or Letter
of Undertaking without payment of integrated tax followed by claim of refund of
unutilized input tax credit or on payment of integrated tax with provision for
refund of the tax paid.
2. With
the onset of GST, extant procedures relating to export of goods viz. claim of
rebate/refund, stuffing of containers at the factory, warehouse or any other
place from where the goods are intended to be exported etc. would require
review of the existing procedures. In this regard, attention is drawn to
notification No's 42/2001-CE (N.T.) to 45/2001-CE (N.T.) both dated 26.6.2001
detailing the procedure to be followed for the export of goods on payment of
terminal excise duty and 19/2004-CE (N.T.) and 20/2004-CE (N.T.), both dated
06.09.04, without payment thereof.
A. Procedure
of Export
3. Any
person making zero rated supply (i.e. any exporter) shall be eligible to claim
refund under either of the following options, namely: -
(a) he may supply
goods or services or both under bond or Letter of Undertaking, subject to such
conditions, safeguards and procedure as may be prescribed, without payment of
integrated tax and claim refund of unutilized input tax credit; or
(b) he may supply
goods or services or both, subject to such conditions, safeguards and procedure
as may be prescribed, on payment of integrated tax and claim refund of such tax
paid on goods or services or both supplied, in accordance with the provisions
of section 54 (Refunds) of the Central Goods and Services Tax Act or the rules
made there under (i.e. the Central Goods and Service Tax Rules, 2017).
4. For
the option (a) above, procedure to file refund has been outlined in the
Central Goods and Service Tax Rules, 2017. The exporter claiming refund of
unutilized input tax credit will file an application electronically through the
Common Portal, either directly or through a Facilitation Centre notified by the
GST Commissioner. The application shall be accompanied by documents as
prescribed in the said rules. Application for refund shall be filed only after
the export manifest or an export report, as the case may be, is delivered under
section 41 of the Customs Act, 1962 in respect of such goods. The formats for
furnishing bond or LUT for export of goods have been separately notified under
COST Rules, 2017. The said formats are attached herewith for easy reference.
5. For
the option (b), broadly the procedure is that a registered person shall
not be required to file any application for refund of integrated goods and
services tax paid on supply of goods for exports. The shipping bill, having
inter-alia GST invoice details, filed by an exporter shall be deemed to be an
application for refund of integrated tax paid on the goods exported out of
India and such application shall be deemed to have been filed only when the
person in charge of the conveyance carrying the export goods duly files an
export manifest or an export report covering the number and the date of
shipping bills or bills of export and the applicant has furnished a valid
return in FORM GSTR-3. The details of the relevant export invoices contained in
FORM GSTR-1 shall be transmitted electronically by the common portal to the
Customs system and the said system shall in turn electronically transmit back
to the common portal a confirmation that the goods covered by the said invoices
have been exported out of India. Upon receipt of information regarding
furnishing of valid return in FORM GSTR-3 from the common portal, the Customs
system shall process the claim for refund and an amount equal to the integrated
tax paid in respect of each shipping bill or bill of export shall be
electronically credited to the bank account of the applicant mentioned in his
registration particulars. Government has allowed a grace period to the
registrants to file returns under the new GST Law. Therefore, this refund
procedure shall as a consequence come into operation only when the registrants
file the above mentioned returns. Further, the exporters are free to avail option
(a) or option (b). The refund shall be governed by the provisions of the
section 16 of the IGST Act.
6. In
order to ensure smooth transition from the earlier export procedure to the
procedure being laid down for export of goods under the GST regime, the
existing Shipping Bill formats (both manual/ electronic) have been modified to
make them compliant with the IGST law. New formats of the Shipping Bill have
been made applicable already. ARE-1 procedure which was being followed is
dispensed with except in respect of commodities to which provisions of Central
Excise Act would continue to be applicable.
B. Sealing
of Containers
7. Board
has in the past issued various circulars both on the Excise and Customs side on
the issue of sealing of containers. A gist of these Circulars and the subject
matter dealt in them is given in the annexure to this circular. At present,
there are three categories of containers which arrive at the port/ICD:
a. Containers
stuffed at factory premises or warehouse under self-sealing procedure.
b. Containers
stuffed / sealed at factory premises or warehouse under supervision of central
excise officer.
c. Containers
stuffed and sealed at Container Freight Stations/ Inland Container Depot.
8. For
the sake of uniformity and ease of doing business, Board has decided to
simplify the procedure relating to factory stuffing hitherto carried out under
the supervision of the Central Excise officers. It is the endeavor
of the Board to create a trust based environment where compliance in accordance
with the extant laws is ensured by strengthening Risk Management System and
Intelligence setup of the department. Accordingly, Board has decided to lay
down a simplified procedure for stuffing and sealing of export goods in
containers.
9. It
has been decided to do away with the sealing of containers with export goods by
CBEC officials. Instead, self-sealing procedure shall be followed subject to
the following:
i. The exporter shall be under an obligation
to inform the details of the premises whether a factory or warehouse or any
other place where container stuffing is to be carried out, to the
jurisdictional customs officer.
ii. The
exporter should be registered under the GST and should be filing GSTRI and
GSTR2. Where exporter is not a GST registrant, he shall bring the export goods
to a Container Freight Station/Inland Container Depot for stuffing and sealing
of container. However, in certain situations, an exporter may follow the
self-sealing procedure even if he is not required to be registered under GST
Laws. Such an exception is available to the Status Holders recognized by DGFT
under a valid status holder certificate issued in this regard.
iii. Any
exporter desirous of availing this procedure shall inform the jurisdictional
Custom Officer of the rank of Superintendent or Appraiser of Customs, at least
15 days before the first planned movement of a consignment from his/her
factory/ premises, about the intention to follow self- sealing procedure to
export goods from the factory premises or warehouse. The jurisdictional
Superintendent or an Appraiser or an Inspector of Customs shall visit the
premises from where the export goods will be stuffed & sealed for export.
The jurisdictional Superintendent or Inspector of Customs shall inspect the
premises with regard to viability of stuffing of container in the premises and
submit a report to the jurisdictional Deputy Commissioner of Customs or as the
case may be the Assistant Commissioner of Customs within 48 hours. The
jurisdictional Deputy Commissioner of Customs or as the case may be the
Assistant Commissioner of Customs shall forward the proposal, in this regard to
the Principal Commissioner/Commissioner of Customs who would grant permission
for selfsealing at the approved premises. Once the
permission is granted, the exporter shall furnish only intimation to the
jurisdictional Superintendent or Customs each time self-sealing is carried out
at approved premises. The intimation, in this regard shall clearly mention the
place and address of the approved premises, description of export goods and
whether or not any incentive is being claimed.
iv. Where
the visit report of the Superintendent or an Appraiser or an Inspector of
Customs regarding viability of the stuffing at the factory/ premises is not favorable, the exporter shall bring the goods to the
Container Freight Station /Inland Container Depot/Port for sealing purposes.
v. Self-Sealing
permission once given by a Principal Commissioner/Commissioner of Customs shall
be valid for export at all the customs stations. The customs formation granting
the selfsealing permission shall circulate the
permission along with GSTIN of the exporter to all Custom Houses/Station
concerned.
vi. Transport
document for movement of self-sealed container by an exporter from factory or
warehouse shall be same as the transport document prescribed under the GST
Laws. In the case of an exporter who is not a GST registrant, way bill or
transport challan or lorry receipt shall be the
transport document.
vii. The
exporter shall seal the container with the tamper proof electronic-seal of
standard specification. The electronic seal should have a unique number which
should be declared in the Shipping Bill. Before sealing the container, the
exporter shall feed the data such as name of the exporter, IEC code, GSTIN
number, description of the goods, tax invoice number, name of the authorized
signatory (for affixing the e-seal) and Shipping Bill number in the electronic
seal. Thereafter, container shall be sealed with the same electronic seal before
leaving the premises.
viii. The
exporter intending to clear export goods on self-clearance (without employing a
Customs Broker) shall file the Shipping Bill under digital signature.
ix. All
consignments in self-sealed containers shall be subject to risk based criteria
and intelligence, if any, for examination / inspection at the port of export.
At the port/ICD as the case may be, the customs officer would verify the
integrity of the electronic seals to check for tampering if any enroute. The Risk Management System (RMS) is being suitably
revamped to improvise the interdiction/ examination norms. However, random or
intelligence based selection of such containers for examination/scanning would
continue.
10. Board
has decided that the above revised procedure regarding sealing of containers
shall be effective from 01.09.2017. A future date has been prescribed since the
returns under GST have been permitted to be filed by 10.09.17 and also with the
purpose to give enough time to the stakeholders to adapt to the new procedures.
Therefore, as a measure of facilitation, the existing practice of sealing the
container with a bottle seal under Central Excise supervision or otherwise
would continue. The extant circulars shall stand modified on 01.09.2017 to the
extent the earlier procedure is contrary to the revised instructions given in
this circular.
11. Suitable
public Notices may be issued in this regard. Difficulty faced, if any, may be
brought to the notice of the Board.