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Businesses today are relatively well versed with GST requirements for intrastate and interstate invoices. However, questions tend to arise in cases where the place of supply is outside India. Export invoices help the customs authority verify the shipments’ contents and calculate the applicable taxes on them.
An export invoice is a document containing the description of the goods or services provided by an exporter and the amount due from the importer. The format is relatively similar compared to a regular tax invoice with a few additional details in it.
Often, the question arises as to whether commercial invoices and export invoices are the same. An export invoice includes the elements such as commercial invoice, proforma invoice and packing list. Export invoices are used by the governmental authorities in the assessment and calculation of taxes and duties to be levied.
As per GST law, there are three types of exports-
It is possible to export goods or services without paying IGST. The provisions in CGST regulations, 2017 for exporters who choose to export without IGST are spelt out in section 96A. It is mandatory to file a Letter of Undertaking when exporting goods or services without paying IGST.
Letters of Undertaking (LUsavesave exporters the hassle of seeking a refund and eliminates blocking funds using tax payments. The LUT will be furnished as per the GST RFD 11 form by any registered person who-
Contrary to the first method, the exporter will have to pay the IGST at export and then claim a refund later on. A refund can be claimed for:
To boost exports, there are certain relaxations given in terms of taxes to be paid on exports. The supply of goods to an SEZ is treated as a zero-rated supply, which means the taxes on the export need not be paid.
As per Section 31 of the CGST Act, 2017, the time limit is dependent on whether it is a supply of goods or a supply of services.
International shipments require a packing list to guard against incorrect cargo. This document supports goods being shipped from one business to another and can accompany a certificate of inspection. The export invoice contains certain details that give information regarding certain details related to packing and shipping. The following details will be present in the export invoice-
As per the RBI Master Directions (RBI/FED/2015-16/11), there is no restriction on export invoices to contain foreign currency only. They may be presented in INR as well.
No, e-invoicing is not mandatory for everyone. E-invoicing does not apply to any government department or any local authority. SEZs are exempted from issuing e-invoices. As per the notification issued on 8th March 2021, all businesses with an aggregated turnover of more than Rs.50 crores will have to implement the e-invoicing system.
There is no mandatory requirement that states that export invoices have to be issued in foreign currency only. Therefore, an exporter may issue the invoice in INR as well.
DBK stands for Duty Drawback Scheme. It is the refund of excise duty paid on goods that are exported.