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CMA Final · Indirect Tax Laws and Practice · Zero Rated Supplies and Deemed Exports

Anand Exports Ltd (Pune) made zero-rated supplies of goods without payment of tax under LUT during a quarter. Value declared in tax invoices and FOB value in shipping bills differ. Under the Explanation to rule 89(4), the value of goods exported out of India is taken as:

For the refund formula, the value of exported goods is the lower of the FOB value declared in the shipping bill or bill of export and the value declared in the tax invoice or bill of supply. The higher value is not used.

  1. AThe FOB value in the shipping bill or the value in the tax invoice, whichever is lessCorrect
  2. BThe FOB value in the shipping bill or the value in the tax invoice, whichever is more
  3. CAlways the tax invoice value
  4. DAlways 1.5 times the FOB value

Explanation

The Explanation states that the value of goods exported is the FOB value declared in the Shipping Bill or Bill of Export, or the value declared in the tax invoice or bill of supply, whichever is less. 'Whichever is more' reverses the rule. The 1.5 times limit relates to like goods domestically supplied, not to this explanation.

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