Important FTP provisions in the context of the implementation of the GST regime applicable w.e.f. 01.07.2017

Circular No.ES/96 /2017-18                                                            July 01, 2017

To: Members of the Council

Sub: Important FTP provisions in the context of the implementation of the GST regime applicable w.e.f. 01.07.2017

DGFT vide Trade Notice No.11/2018 dated 30^th June, 2017 has issued Important Provisions of the Foreign Trade Policy with the Goods and Services Tax (GST).

The Relevant Chapter-wise Provisions of the FTP 2015-20 are as follows :

General Provision:

• With effect from July 1, 2017, the term "Central Excise Authority" used in Foreign Trade Policy 2015-20 and Foreign Trade procedures 2015-20 should be read as "Jurisdictional Customs Authority".

Chapter 2:

• Changes in IEC are notified through Trade Notice NO.09/2018 dated 12.06.2017

Chapter 3

• The Duty Credit Scrips (issued under Chapter 3 of the FTP) cannot be used for payment of IGST and GST compensation cess in imports, and CGST, SGST, IGST and GST compensation cess for domestic procurement.

Chapter 4:

• Under the GST regime, no exemption from payment of integrated GST and compensation cess would be available for imports under Advance Authorisation.
• Importers would need to pay IGST and take input tax credit.

Chapter 5:

• Importers would need to pay IGST and take input tax credit as applicable under GST rules.

Chapter 6:

• Imports by EOU/ EHTP/STPIBTP:

For export oriented units (EOUs) they are allowed duty free imports of goods for their authorized operations. In GST regime the import of goods covered under GST would be exempted from the whole of the duty of customs.

• Domestic procurements:

For the indigenous procurement of goods covered under GST, the EOU will not get ab-initio exemptions. Such supplies would be on payment of CGST/SGST/UTGST/IGST. The taxes so paid will be neutralised by ITC (input tax credit).

Chapter 7:

• Supplies after the date of operationalization of GST:

Deemed Export Drawback:

The drawback as provided under Chapter 7 would be limited to the refund of basic custom duty only.

Members may kindly make note of the above.

 Thanking you,

V. ANIL KUMAR

EXECUTIVE DIRECTOR