CMA Final · Indirect Tax Laws and Practice · GST Refunds - Inverted Duty Structure and Zero Rated Supplies
Under the refund rule for zero-rated supply of goods without payment of tax under bond or LUT, the 'turnover of zero-rated supply of goods' is taken as the lower of two figures. Which pair of figures is compared?
The turnover of zero-rated supply of goods is the lower of the value of goods supplied under bond or LUT without tax and 1.5 times the value of like goods domestically supplied by the same or a similarly placed supplier, as declared by the supplier.
- AValue of zero-rated supply made without payment of tax, and 1.5 times the value of like goods domestically supplied by the same or a similarly placed supplierCorrect
- BValue of zero-rated supply made without payment of tax, and 2 times the value of like goods domestically supplied by the same supplier
- CFOB value in the shipping bill, and the total turnover of the registered person in the State
- DValue of zero-rated supply made without payment of tax, and the adjusted total turnover
Explanation
Clause (C) of rule 89(4) says the turnover of zero-rated supply of goods is the value of such supply made without payment of tax under bond or LUT, or 1.5 times the value of like goods domestically supplied by the same or a similarly placed supplier, as declared by the supplier, whichever is less. The multiple is 1.5, not 2, and the cap is not tied to adjusted total turnover.
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