To import or export in India, IEC Code is mandatory. No person or entity shall make any Import or Export without IEC Code Number, unless specifically exempted.

An individual or a company who wants to do international business can get an IEC. Individuals can use either the name of their company or their name directly to apply for IEC.

IEC shall be not be necessary except when the service provider is taking benefits under the Foreign Trade Policy.

IEC is issued in electronic form (e-IEC) by Directorate General of Foreign Trade (DGFT) which is under Ministry of Commerce, Government of India.

Application fee to get IEC is Rs. 500/-

An IEC allotted to an applicant shall have permanent validity but it is mandatory to update the IEC annually so that the IEC is not deactivated. If the IEC is updated between April-June period each year, no fee shall be charged for updation of IEC

In case of non-updation of IEC within the prescribed time, it will be de-activated. An IEC so de-activated may be activated, on its successful updation. This would however be without prejudice to any other action taken for violation of any other provisions of the FTP.

For specific items of export and import NOC/License or any other documents like Phytosanitary Certificate, Health Certificate, Drug License, etc. as specified document for a specific product to be furnished to ensure legal compliance.

Such goods maybe exported/ imported only in accordance with an authorization or permission order.

A penal action for violating any condition of authorization or failing payment of demand notice within specified time. This action blocks the facilities available under the Policy till compliance by the exporter.

Export of bonafide trade and technical samples of freely exportable item are allowed without any limit. Similarly, Duty free import of samples upto Rs. 300000 for all exporters are allowed as per terms and conditions of Customs Notification.

“SCOMET” is the nomenclature for dual use items of Special Chemicals, Organisms, Materials, Equipment and Technologies (SCOMET). Export of dual-use items and technologies under India’s Foreign Trade Policy is regulated. It is either prohibited or is permitted under an Authorisation.

Third party exports means exports made by an exporter or manufacturer on behalf of another exporter(s).

Customs duty is the duty charged on goods on their importation into India or exportation out of India.

Indian Trade Classification (Harmonized System) [ITC (HS)] is a compilation of codes for all merchandise / goods for export/ import. Goods are classified based on their group or sub-group at 2/4/6/8 digits.

Under the Scheme, exporters are reimbursed the Customs Duty paid on inputs used in export production.

Drawback is claimed in the Shipping Bill filed and separate application is required to be filed. After actual export of goods, the Drawback is processed through EDI Systems. The claim amount is directly credited in the designated Bank Account in the designated Bank registered in the System.

The RBI regulates the foreign exchange matters as per the FEMA Act. It issues guidelines for realization of export proceeds by the exporter from time to time through the authorized dealers.

As per the FEMA Act, there is no such restriction. All export contracts & invoices may be denominated either in Indian rupee or in any freely foreign exchange. However, to avail export benefits under Foreign Trade Policy export proceeds is required to be realized in freely convertible currency.

Within 21 days from the date of export, the documents are required to be submitted to the AD Bank.

On late submission of the export documents after the prescribed period of 21 days from date of export, Banks may handle them without prior approval of the Reserve Bank, provided they are satisfied with the reasons for the delay.

Only status holder and units in SEZ are permitted to dispatch the export documents to the consignees outside India subject to the terms and conditions. Direct dispatch may also be made if advance payment or an irrevocable letter of credit has been received for the full value of the export shipment and the underlying sale contract/letter of credit provides for dispatch of documents direct to the consignee or his agent resident in the country of final destination of goods.

Time period for realization of export proceeds for all exporters is NINE Months.

The full value of the goods exported should be received through an AD Bank preferably in a freely convertible currency.

Where an exporter receives advance payment (with or without interest), from a buyer outside India, the exporter shall be under an obligation to ensure that the shipment of goods is made within one year from the date of receipt of advance payment.

Yes, it is allowed subject to certain conditions like tripartite agreement, routing the payment through banking channel, declaring third party/country remittances in the Shipping Bill etc.

Advance authorization is for duty free import of inputs which are actually incorporated in export product. It is issued for inputs in relation to resultant product.

Manufacturer exporter or Merchant exporter tied to supporting manufacturer can obtain Advance authorization.

12 months from the date of issue.

It is 18 months from the date of issue of authorization. It can be extended for 6 months from the date of expiry of EO period on payment of composition fee of 0.5% of the short fall. Further, extension of 6 months after first extension may also be granted on payment of composition fee at 0.5% per month on unfulfilled value of the EO provided minimum 50% EO in quantity and value has been fulfilled.

Yes, there is exemption from IGST under AA till 31.03.2022.

Export Promotion Capital Goods (EPCG) scheme is a scheme which allows an exporter to import of capital goods including spares for pre-production, production and post-production at zero Customs duty, for exports. Also, IGST on import of capital goods under EPCG is exempted till 31st March 2022.

EPCG Authorization holder may source Capital Goods from domestic manufacturers also.

Domestic manufacturers will be eligible for deemed export benefits. Specific EO shall be 25% less than the stipulated EO. Domestic sourcing of capital goods shall not attract GST till 31st March 2022.

The issuing authorities are the Regional Licensing Authorities of Director General of Foreign Trade (DGFT), Ministry of Commerce & Industry. An online application in Form ANF 5A is filed online at dgft.gov.in using digital signature with the Company and personal details.

As per the Foreign Trade Policy, an application, which is complete in all respect, should be processed by DGFT in 3 days.

Export Obligation under EPCG Scheme is required to be fulfilled by export of goods manufactured/services rendered through the Machine by the applicant.

The transactions in which goods supplied do not leave the country and payment for the same is either received in INR or in free foreign exchange are categorized under deemed exports.

Supplier/ Recipient may file the application in ANF7A to the concerned RA. In case of supply of goods to EOU, claim is required to be filed to the concerned Development commissioner, if claimed by EOU.

For supply to Advance/EPCG License holders & to EUO, etc., application can be filed within 12 months from the last date of such supplies. For supply to Projects, etc. within 12 months from the date of receipt of supplies by the project authority or from the date of receipt of payment by the supplier.

All exports are deemed as inter-State supplies. Exports of goods and services are treated as zero rated supplies. The exporter has the option either to export under bond/Letter of Undertaking without payment of tax and claim refund of ITC or pay IGST by utilizing ITC or in cash at the time of export and claim refund of IGST paid.

Yes, any zero rated supply is eligible for input tax credit paid by such supplier. As per section 16(2) of the IGST Act, credit of input tax may be availed for making zero-rated supplies; notwithstanding that such supply may be an exempt supply.

No, there is no such provision in GST. Tax has to be payable on their inward supplies and they can claim refund of the accumulated ITC. However, there is a 0.1% scheme in which a supplier can supply goods to an exporter by paying only 0.1% GST and claim refund of unutilised ITC. The exporter in such a scenario cannot export on payment of integrated tax and take refund. He has to adopt the LUT/Bond route only.

For a currency when exchanged to Indian Rupee, the value of taxable purpose shall be equal to the difference in the buying rate /selling rate, as the case may be, and the RBI reference rate for the currency at that time multiplied by the total value of unit. In case RBI reference rate is not available for the currency, the value will be gross amount of Indian Rupee provided or received by the person changing the money.

Provisions relating to refund are contained in section 54 of the CGST Act, 2017. It provides for refund of tax paid on zero-rated supplies of goods or services or on inputs or input services used in making such zero-rated supplies, or refund of tax on the supply of goods regarded as deemed exports, or refund of unutilized input tax credit. Identical provisions exist under the IGST Act, 2017 and relevant SGST/UTGST Acts.

No application for refund is to be made for IGST as the Shipping Bill itself is a claim for refund. In the case of refund of IGST paid on exports: Upon receipt of information regarding furnishing of valid return in Form GSTR-3 by the exporter from the common portal, the Customs shall process the claim for refund and an amount equal to the IGST paid in respect of each shipping bill shall be credited to the bank account of the exporter.

Export of goods to Nepal or Bhutan fulfils the condition of GST Law regarding taking goods out of India. Hence, export of goods to Nepal and Bhutan will be treated as zero rated and consequently will also qualify for all the benefits available to zero rated supplies under the GST regime. However, the definition of ‘export of services’ in the GST Law requires that the payment for such services should have been received by the supplier of services in convertible foreign exchange.

IGST on imports has to be paid in cash only as it is charged on reverse charge. The inter-state IGST can be paid by utilizing ITC to the extent available and balance by cash. The use of ITC for payment of IGST will be done in the following order: Firstly ITC of IGST shall be used for payment of IGST. Once ITC of IGST is exhausted, the ITC of CGST shall be used. If ITC of both IGST and CGST are exhausted, ITC of SGST shall be used. Remaining IGST liability shall be discharged in cash.

If the recipient fails to pay to the supplier the amount towards the value of supply along with tax payable thereon within a period of 180 days from the date of issue of invoice by the supplier, the amount of input tax credit availed proportionate to the amount not paid would be added to his output tax liability along with interest thereon. The ITC so reversed can be reclaimed by the recipient after payment of consideration along with tax payable there on subsequently.