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CMA Final · Indirect Tax Laws and Practice · GST Refunds - Inverted Duty Structure and Zero Rated Supplies

Kaveri Exports supplies goods under a letter of undertaking without payment of tax. Shipping Bill FOB value is Rs 12,00,000 and the tax invoice value is Rs 10,00,000. Under the rule 89(4) explanation, what value of exported goods is taken for the zero-rated turnover, assuming the 1.5 times like goods domestic value limit is not lower?

The value taken is Rs 10,00,000, because the rules take the lower of the FOB value declared in the Shipping Bill and the value declared in the tax invoice. Using the higher FOB value of Rs 12,00,000 would be wrong.

  1. ARs 10,00,000Correct
  2. BRs 12,00,000
  3. CRs 11,00,000
  4. DRs 22,00,000

Explanation

The explanation takes the FOB value in the Shipping Bill or the value in the tax invoice or bill of supply, whichever is less. The lesser is Rs 10,00,000. Taking the FOB value of Rs 12,00,000 ignores the lower-of test.

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