SKP Group
SKP GST Update
23 June 2017
GST rollout - FAQs released by the Directorate General of Foreign Trade (DGFT)

Import and export-related transactions come within the purview of the Customs Act, 1962, Chapter V of the Finance Act, 1994 and Foreign Trade Policy, 2015-2020 (FTP 2015 - 2020). Considering the fact that GST is going to be implemented from 1 July 2017, the stakeholders believed that there should be some clarification that should be provided by the DGFT for aligning GST with the FTP 2015 - 2020.

To solve any doubts, the DGFT portal has released a list of FAQs providing certain clarifications which would enable the business as a whole to carry on their business (import and export related) without any business disruption.
  • A brief summary of the FAQs released by the DGFT is given below:  
    1. Merchandise Exports from India Scheme (MEIS) and Service Exports from India Scheme (SEIS) duty credit scrips would be allowed to be utilised ‘only’ towards the payment of Basic Customs Duty (BCD).  
    2. Export Oriented Units (EOUs) related
      • EOUs will have to pay IGST on import of goods
      • No ab initio exemption available to 100% EOUs for IGST on imports
      • EOUs to be treated at par with the Domestic Tariff Area (DTA) for the purpose of purchases/imports
      • Input Tax Credit (ITC) would be available in respect of IGST paid subject to the ITC rules and refund of which can be taken as per the refund rules.  
    1. Import-Export Code (IEC) related
      • The IEC code should be updated in the GSTIN. Updation of correct PAN for a particular IEC can be done at the jurisdictional DGFT regional office
      • In order to claim ITC/refund, as the case may be, declaration of GSTIN would be mandatory on all the shipping bills with effect from 1 July 2017.  
    1. Only Basic Customs Duty (BCD) exemption would be available in respect of the imports made under advance authorisation. IGST to be paid for imports under advance authorisation.
    2. In the case of a newly started export firm, only a GST registration would be required instead of VAT/CST. However, the FAQs provide that if the product to be exported is not covered under GST then VAT/CST would be required.
  • The DGFT has constituted a GST facilitation cell to assist and advise exporters, traders and the industry for a smooth transition from present regime to GST regime with effect from 1 July 2017. The exporters can email their queries concerning GST and FTP.  
  • The GST Facilitation Cell is headed by Dr Sonia Sethi (Additional DGFT), K. M. Harilal (Deputy DGFT) and Prakash Kamble (Assistant DGFT) are members of the Cell. The contact details of the GST Facilitation Cell are given below:
Name of the officer Email Contact no
K. M. Harilal km.harilal@nic.in 022-22001247
P. S. Kamble ps.kamble@nic.in 022-22017716
SKP's comments
  • The setting up of the GST facilitation cell by the DGFT would prove to be of day-to-day help to the importers and exporters. Furthermore, it also means that the Ministry of Commerce is engaging itself with the stakeholders to resolve the GST issues.
  • The release of FAQs and clarification of issues is a welcome step and it would help importers and exporters to plan in advance in light of GST implementation.
  • All the eyes would now be on the revised FTP policy which would align the FTP provisions with GST.
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This update contains general information which is provided on an “as is” basis without warranties of any kind, express or implied and is not intended to address any particular situation. The information contained herein may not be comprehensive and should not be construed as specific advice or opinion. This update should not be substituted for any professional advice or service, and it should not be acted or relied upon or used as a basis for any decision or action that may affect you or your business. It is also expressly clarified that this update is not intended to be a form of solicitation or invitation or advertisement to create any adviser-client relationship.

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