Ch 18 - Exports and Imports and SEZ supplies | GST Saral by CA Dhruv Aggarwal PDF Download

 Page 1


CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
 
 
 
 
 
 
 
 
 
 
CHAPTER 18 - Exports and i mports and SEZ suppl i es 
 
 
 
 
 
CHAPTER 18 
 
Exports and imports and SEZ supplies 
 
EXECUTIVE SUMMARY 
 
?   In relation to GST, fo lowing are the concessions/incentives  for exports : (1) Exemption from GST 
on final products or (2) Refund of GST paid on inputs. 
?   Export of goods or services or both and supplies of goods or services or both to SEZ unit or SEZ 
developer will be zero rated supply - section 16(1) of IGST Act. 
?   Credit of input tax may be availed for making zero-rated supplies, even if such supply is exempted 
supply - section 16(2) of IGST Act. 
?   Ref und of unutilized input tax credit shall not be a lowed in cases where the goods exported out of 
India are subjected to export duty. 
?   Refund  of input tax credit shall not be a lowed  if the supplier of goods or services  avails duty 
drawback of CGST/SGST/UTGST  or claims refund of IGST paid on such supplies [Thus, duty 
drawback of customs portion can be availed]. 
?   Benefits will be available to 'deemed exports' also. Mostly, the benefit will be through refund route 
and not direct exemption. 
?   If goods are imported, IGST and GST Compensation Cess will be payable. 
?   If goods are taken to warehouse and then cleared from warehouse, IGST and GST Compensation 
Cess will be payable at the time of removal from warehouse. 
?   IGST Act or CGST Act make no provision in respect of high seas sale i.e. sale in course of imports. 
In absence of such specific provision,  it seems IGST will be payable if sale takes place within 
Exclusive Economic Zone i.e. within 200 nautical miles inside sea [Let us hope some solution will be 
given by Government]. 
18.1 Export of goods 
 
"Export of goods" with its grammatical variations and cognate expressions, means taking goods out of India to 
a place outside India - section 2(5) of IGST Act. 
18.1-1 Export promotion under GST 
 
Exports are priority of any country. 
 
Goods and services are to be exported, taxes are not to be exported. WTO stipulates free and fair global 
trade. Giving export incentives  will be against principle  of fair trade and hence export incentives  are not 
a lowed under WTO. However, goods and services can be made free of domestic taxes. 
Supplies to SEZ unit and SEZ Developer are treated at par with physical exports. 
Provisions in CGST Act have been designed by make exports tax free. 
Page 2


CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
 
 
 
 
 
 
 
 
 
 
CHAPTER 18 - Exports and i mports and SEZ suppl i es 
 
 
 
 
 
CHAPTER 18 
 
Exports and imports and SEZ supplies 
 
EXECUTIVE SUMMARY 
 
?   In relation to GST, fo lowing are the concessions/incentives  for exports : (1) Exemption from GST 
on final products or (2) Refund of GST paid on inputs. 
?   Export of goods or services or both and supplies of goods or services or both to SEZ unit or SEZ 
developer will be zero rated supply - section 16(1) of IGST Act. 
?   Credit of input tax may be availed for making zero-rated supplies, even if such supply is exempted 
supply - section 16(2) of IGST Act. 
?   Ref und of unutilized input tax credit shall not be a lowed in cases where the goods exported out of 
India are subjected to export duty. 
?   Refund  of input tax credit shall not be a lowed  if the supplier of goods or services  avails duty 
drawback of CGST/SGST/UTGST  or claims refund of IGST paid on such supplies [Thus, duty 
drawback of customs portion can be availed]. 
?   Benefits will be available to 'deemed exports' also. Mostly, the benefit will be through refund route 
and not direct exemption. 
?   If goods are imported, IGST and GST Compensation Cess will be payable. 
?   If goods are taken to warehouse and then cleared from warehouse, IGST and GST Compensation 
Cess will be payable at the time of removal from warehouse. 
?   IGST Act or CGST Act make no provision in respect of high seas sale i.e. sale in course of imports. 
In absence of such specific provision,  it seems IGST will be payable if sale takes place within 
Exclusive Economic Zone i.e. within 200 nautical miles inside sea [Let us hope some solution will be 
given by Government]. 
18.1 Export of goods 
 
"Export of goods" with its grammatical variations and cognate expressions, means taking goods out of India to 
a place outside India - section 2(5) of IGST Act. 
18.1-1 Export promotion under GST 
 
Exports are priority of any country. 
 
Goods and services are to be exported, taxes are not to be exported. WTO stipulates free and fair global 
trade. Giving export incentives  will be against principle  of fair trade and hence export incentives  are not 
a lowed under WTO. However, goods and services can be made free of domestic taxes. 
Supplies to SEZ unit and SEZ Developer are treated at par with physical exports. 
Provisions in CGST Act have been designed by make exports tax free. 
CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
Export benefits under GST - In relation to GST, fo lowing are the concessions/incentives for exports : 
(1)   Exemption from GST on final products or 
(2)   Refund of GST paid on inputs. 
Exporting units need raw materials without payment of taxes and duties, to enable them to compete with world 
market. Government has devised fo lowing schemes for this purpose : 
 
(a)   Special Economic Zones at various places where inputs are a lowed to be imported without payment 
of duty and finished goods are exported 
(b)   Export Oriented Undertakings (EOU) 
(c)   Duty Drawback Scheme 
(d)   Schemes of Advance Authorisation, DEPB and DFIA. 
Elaborate procedures have been prescribed for the above, to ensure that the benefits are not misused. 
 
18.1-2 Zero rated supply 
 
"Zero-rated supply" means a supply of any goods or services or both in terms of section 16 of IGST Act - 
section 2(23) of IGST Act. 
Export of goods or services or both and supplies of goods or services or both to SEZ unit or SEZ developer 
will be zero rated supply - section 16(1) of IGST Act. 
Credit of input tax may be availed for making zero-rated supplies, even if such supply is exempted supply - 
section 16(2) of IGST Act. 
The registered person making zero rated supply can claim refund under either of two options - (a) supply 
goods under bond or LUT without payment of IGST and claim refund of unutilized input tax credit or (b) 
supply goods on payment of IGST and claim refund of IGST paid on goods and services. The refund will be in 
accordance with section 54 of CGST Act - section 16(3) of IGST Act. 
18.1-3 Refund of input  tax credit in case of export of goods 
 
In case of zero rated supplies made without payment of tax, ref und of input tax credit will be available as per 
proviso (i) to section 54(2) of CGST Act. 
No refund of unutilized  input tax credit shall be a lowed in cases other than exports including zero rated 
supplies or in cases where the credit has accumulated on account of rate of tax on inputs being hi gher than the 
rate of tax on output supplies, other than nil rated or fully  exempt supplies - first proviso to section 54(3) of 
CGST Act. 
No ref und of unutilized input tax credit shall be a lowed in cases where the goods exported out of India are 
subjected to export duty - second proviso to section 54(3) of CGST Act. 
No refund of input tax credit shall be a lowed if the supplier of goods or services avails duty drawback of 
CGST/SGST/UTGST  or claims refund of IGST paid on such supplies - third proviso to section 54(3) of 
CGST Act. 
Drawback  - "Drawback" in relation to any goods manufactured in India and exported, means the rebate of 
duty, tax or cess chargeable on any imported inputs or on any domestic inputs or input services used in the 
manufacture of such goods - section 2(42) of CGST Act. 
18.2 Deemed Exports 
 
India gets foreign aid from World Bank, Asia Development bank etc. for various prestigious projects in India 
for which global tenders are i nvited and India gets aid in foreign currency. Indian manufacturers and suppliers 
Page 3


CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
 
 
 
 
 
 
 
 
 
 
CHAPTER 18 - Exports and i mports and SEZ suppl i es 
 
 
 
 
 
CHAPTER 18 
 
Exports and imports and SEZ supplies 
 
EXECUTIVE SUMMARY 
 
?   In relation to GST, fo lowing are the concessions/incentives  for exports : (1) Exemption from GST 
on final products or (2) Refund of GST paid on inputs. 
?   Export of goods or services or both and supplies of goods or services or both to SEZ unit or SEZ 
developer will be zero rated supply - section 16(1) of IGST Act. 
?   Credit of input tax may be availed for making zero-rated supplies, even if such supply is exempted 
supply - section 16(2) of IGST Act. 
?   Ref und of unutilized input tax credit shall not be a lowed in cases where the goods exported out of 
India are subjected to export duty. 
?   Refund  of input tax credit shall not be a lowed  if the supplier of goods or services  avails duty 
drawback of CGST/SGST/UTGST  or claims refund of IGST paid on such supplies [Thus, duty 
drawback of customs portion can be availed]. 
?   Benefits will be available to 'deemed exports' also. Mostly, the benefit will be through refund route 
and not direct exemption. 
?   If goods are imported, IGST and GST Compensation Cess will be payable. 
?   If goods are taken to warehouse and then cleared from warehouse, IGST and GST Compensation 
Cess will be payable at the time of removal from warehouse. 
?   IGST Act or CGST Act make no provision in respect of high seas sale i.e. sale in course of imports. 
In absence of such specific provision,  it seems IGST will be payable if sale takes place within 
Exclusive Economic Zone i.e. within 200 nautical miles inside sea [Let us hope some solution will be 
given by Government]. 
18.1 Export of goods 
 
"Export of goods" with its grammatical variations and cognate expressions, means taking goods out of India to 
a place outside India - section 2(5) of IGST Act. 
18.1-1 Export promotion under GST 
 
Exports are priority of any country. 
 
Goods and services are to be exported, taxes are not to be exported. WTO stipulates free and fair global 
trade. Giving export incentives  will be against principle  of fair trade and hence export incentives  are not 
a lowed under WTO. However, goods and services can be made free of domestic taxes. 
Supplies to SEZ unit and SEZ Developer are treated at par with physical exports. 
Provisions in CGST Act have been designed by make exports tax free. 
CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
Export benefits under GST - In relation to GST, fo lowing are the concessions/incentives for exports : 
(1)   Exemption from GST on final products or 
(2)   Refund of GST paid on inputs. 
Exporting units need raw materials without payment of taxes and duties, to enable them to compete with world 
market. Government has devised fo lowing schemes for this purpose : 
 
(a)   Special Economic Zones at various places where inputs are a lowed to be imported without payment 
of duty and finished goods are exported 
(b)   Export Oriented Undertakings (EOU) 
(c)   Duty Drawback Scheme 
(d)   Schemes of Advance Authorisation, DEPB and DFIA. 
Elaborate procedures have been prescribed for the above, to ensure that the benefits are not misused. 
 
18.1-2 Zero rated supply 
 
"Zero-rated supply" means a supply of any goods or services or both in terms of section 16 of IGST Act - 
section 2(23) of IGST Act. 
Export of goods or services or both and supplies of goods or services or both to SEZ unit or SEZ developer 
will be zero rated supply - section 16(1) of IGST Act. 
Credit of input tax may be availed for making zero-rated supplies, even if such supply is exempted supply - 
section 16(2) of IGST Act. 
The registered person making zero rated supply can claim refund under either of two options - (a) supply 
goods under bond or LUT without payment of IGST and claim refund of unutilized input tax credit or (b) 
supply goods on payment of IGST and claim refund of IGST paid on goods and services. The refund will be in 
accordance with section 54 of CGST Act - section 16(3) of IGST Act. 
18.1-3 Refund of input  tax credit in case of export of goods 
 
In case of zero rated supplies made without payment of tax, ref und of input tax credit will be available as per 
proviso (i) to section 54(2) of CGST Act. 
No refund of unutilized  input tax credit shall be a lowed in cases other than exports including zero rated 
supplies or in cases where the credit has accumulated on account of rate of tax on inputs being hi gher than the 
rate of tax on output supplies, other than nil rated or fully  exempt supplies - first proviso to section 54(3) of 
CGST Act. 
No ref und of unutilized input tax credit shall be a lowed in cases where the goods exported out of India are 
subjected to export duty - second proviso to section 54(3) of CGST Act. 
No refund of input tax credit shall be a lowed if the supplier of goods or services avails duty drawback of 
CGST/SGST/UTGST  or claims refund of IGST paid on such supplies - third proviso to section 54(3) of 
CGST Act. 
Drawback  - "Drawback" in relation to any goods manufactured in India and exported, means the rebate of 
duty, tax or cess chargeable on any imported inputs or on any domestic inputs or input services used in the 
manufacture of such goods - section 2(42) of CGST Act. 
18.2 Deemed Exports 
 
India gets foreign aid from World Bank, Asia Development bank etc. for various prestigious projects in India 
for which global tenders are i nvited and India gets aid in foreign currency. Indian manufacturers and suppliers 
CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
of services from India have to quote in competition with foreign suppliers. Evaluation of bids is done without 
considering customs duty. Since the supply of goods and services are for projects financed with free foreign 
exchange, these supplies are treated as 'deemed exports'. 
Similarly, supplies to EOU units and supplies against annual advance authorisation are also 'deemed exports'. 
 
These are so ca led because the goods and services do not leave the country. Suppliers of goods and services 
get payment in Indian rupees and not in foreign currency. 
Deemed exports refer to those transactions in which goods supplied do not leave country, and payment for 
such supplies is received either in Indian rupees or in free foreign exchange. Supply of goods as specified in 
para 7.02 of Foreign Trade Policy 2015-2020 shall be regarded as 'deemed exports', provided that goods are 
manufactured in India. 
As per Foreign Trade Policy 2015-2020, fo lowing are treated as deemed exports : 
 
?   Supplies against Advance Authorisation/DFIA 
?   Supplies to EOU/STP/EHTP/BTP 
?   Supplies against EPCG authorization 
?   Supply of marine freight containers 
?   Supplies to projects against international competitive bidding 
?   Supplies to projects with zero customs duty 
?   Supply of goods to mega power projects against International Competitive Bidding 
?   Supplies to UN Agencies 
?   Supply of goods to nuclear projects through competitive bidding 
18.2-1 Deemed Exports in GST 
 
CGST Act has made provisions of 'deemed exports'. 
 
It appears that benefits similar to physical exports may be grated to them by issue of notification. 
Deemed Exports means such supplies of goods as may be notified under section 147 of CGST Act. 
The Government  may, on the recommendations  of the GST Council,  notify certain supplies  of goods as 
deemed exports, where goods supplied do not leave India, and payment for such supplies is received either in 
Indian rupees or in convertible foreign exchange, if such goods are manufactured in India - section 147 of 
CGST Act. 
As per Explanation  2(b) to section 54 of CGST Act, "relevant date" for filing ref und in case of supply of 
goods regarded as deemed exports where a refund of tax paid is available in respect of the goods, is the date 
on which the return relating to such deemed exports is f iled. 
18.3 Import of goods 
 
"Import of goods" with its grammatical variations and cognate expressions, means bringing goods into India 
from a place outside India - section 2(10) of IGST Act. 
Supply of goods imported into the territory of India, ti l they cross the customs frontiers of India, shall be 
treated to be a supply of goods in the course of inter-State trade or commerce - section 7(2) of IGST Act. 
Warehouse is part of 'customs area' and hence IGST will be payable if sale is made in customs warehouse. 
 
18.3-1 IGST on import of goods 
 
As per section 3(7) of Customs Tariff Act (being introduced w.e.f. 1-7-2017), any article being imported into 
Page 4


CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
 
 
 
 
 
 
 
 
 
 
CHAPTER 18 - Exports and i mports and SEZ suppl i es 
 
 
 
 
 
CHAPTER 18 
 
Exports and imports and SEZ supplies 
 
EXECUTIVE SUMMARY 
 
?   In relation to GST, fo lowing are the concessions/incentives  for exports : (1) Exemption from GST 
on final products or (2) Refund of GST paid on inputs. 
?   Export of goods or services or both and supplies of goods or services or both to SEZ unit or SEZ 
developer will be zero rated supply - section 16(1) of IGST Act. 
?   Credit of input tax may be availed for making zero-rated supplies, even if such supply is exempted 
supply - section 16(2) of IGST Act. 
?   Ref und of unutilized input tax credit shall not be a lowed in cases where the goods exported out of 
India are subjected to export duty. 
?   Refund  of input tax credit shall not be a lowed  if the supplier of goods or services  avails duty 
drawback of CGST/SGST/UTGST  or claims refund of IGST paid on such supplies [Thus, duty 
drawback of customs portion can be availed]. 
?   Benefits will be available to 'deemed exports' also. Mostly, the benefit will be through refund route 
and not direct exemption. 
?   If goods are imported, IGST and GST Compensation Cess will be payable. 
?   If goods are taken to warehouse and then cleared from warehouse, IGST and GST Compensation 
Cess will be payable at the time of removal from warehouse. 
?   IGST Act or CGST Act make no provision in respect of high seas sale i.e. sale in course of imports. 
In absence of such specific provision,  it seems IGST will be payable if sale takes place within 
Exclusive Economic Zone i.e. within 200 nautical miles inside sea [Let us hope some solution will be 
given by Government]. 
18.1 Export of goods 
 
"Export of goods" with its grammatical variations and cognate expressions, means taking goods out of India to 
a place outside India - section 2(5) of IGST Act. 
18.1-1 Export promotion under GST 
 
Exports are priority of any country. 
 
Goods and services are to be exported, taxes are not to be exported. WTO stipulates free and fair global 
trade. Giving export incentives  will be against principle  of fair trade and hence export incentives  are not 
a lowed under WTO. However, goods and services can be made free of domestic taxes. 
Supplies to SEZ unit and SEZ Developer are treated at par with physical exports. 
Provisions in CGST Act have been designed by make exports tax free. 
CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
Export benefits under GST - In relation to GST, fo lowing are the concessions/incentives for exports : 
(1)   Exemption from GST on final products or 
(2)   Refund of GST paid on inputs. 
Exporting units need raw materials without payment of taxes and duties, to enable them to compete with world 
market. Government has devised fo lowing schemes for this purpose : 
 
(a)   Special Economic Zones at various places where inputs are a lowed to be imported without payment 
of duty and finished goods are exported 
(b)   Export Oriented Undertakings (EOU) 
(c)   Duty Drawback Scheme 
(d)   Schemes of Advance Authorisation, DEPB and DFIA. 
Elaborate procedures have been prescribed for the above, to ensure that the benefits are not misused. 
 
18.1-2 Zero rated supply 
 
"Zero-rated supply" means a supply of any goods or services or both in terms of section 16 of IGST Act - 
section 2(23) of IGST Act. 
Export of goods or services or both and supplies of goods or services or both to SEZ unit or SEZ developer 
will be zero rated supply - section 16(1) of IGST Act. 
Credit of input tax may be availed for making zero-rated supplies, even if such supply is exempted supply - 
section 16(2) of IGST Act. 
The registered person making zero rated supply can claim refund under either of two options - (a) supply 
goods under bond or LUT without payment of IGST and claim refund of unutilized input tax credit or (b) 
supply goods on payment of IGST and claim refund of IGST paid on goods and services. The refund will be in 
accordance with section 54 of CGST Act - section 16(3) of IGST Act. 
18.1-3 Refund of input  tax credit in case of export of goods 
 
In case of zero rated supplies made without payment of tax, ref und of input tax credit will be available as per 
proviso (i) to section 54(2) of CGST Act. 
No refund of unutilized  input tax credit shall be a lowed in cases other than exports including zero rated 
supplies or in cases where the credit has accumulated on account of rate of tax on inputs being hi gher than the 
rate of tax on output supplies, other than nil rated or fully  exempt supplies - first proviso to section 54(3) of 
CGST Act. 
No ref und of unutilized input tax credit shall be a lowed in cases where the goods exported out of India are 
subjected to export duty - second proviso to section 54(3) of CGST Act. 
No refund of input tax credit shall be a lowed if the supplier of goods or services avails duty drawback of 
CGST/SGST/UTGST  or claims refund of IGST paid on such supplies - third proviso to section 54(3) of 
CGST Act. 
Drawback  - "Drawback" in relation to any goods manufactured in India and exported, means the rebate of 
duty, tax or cess chargeable on any imported inputs or on any domestic inputs or input services used in the 
manufacture of such goods - section 2(42) of CGST Act. 
18.2 Deemed Exports 
 
India gets foreign aid from World Bank, Asia Development bank etc. for various prestigious projects in India 
for which global tenders are i nvited and India gets aid in foreign currency. Indian manufacturers and suppliers 
CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
of services from India have to quote in competition with foreign suppliers. Evaluation of bids is done without 
considering customs duty. Since the supply of goods and services are for projects financed with free foreign 
exchange, these supplies are treated as 'deemed exports'. 
Similarly, supplies to EOU units and supplies against annual advance authorisation are also 'deemed exports'. 
 
These are so ca led because the goods and services do not leave the country. Suppliers of goods and services 
get payment in Indian rupees and not in foreign currency. 
Deemed exports refer to those transactions in which goods supplied do not leave country, and payment for 
such supplies is received either in Indian rupees or in free foreign exchange. Supply of goods as specified in 
para 7.02 of Foreign Trade Policy 2015-2020 shall be regarded as 'deemed exports', provided that goods are 
manufactured in India. 
As per Foreign Trade Policy 2015-2020, fo lowing are treated as deemed exports : 
 
?   Supplies against Advance Authorisation/DFIA 
?   Supplies to EOU/STP/EHTP/BTP 
?   Supplies against EPCG authorization 
?   Supply of marine freight containers 
?   Supplies to projects against international competitive bidding 
?   Supplies to projects with zero customs duty 
?   Supply of goods to mega power projects against International Competitive Bidding 
?   Supplies to UN Agencies 
?   Supply of goods to nuclear projects through competitive bidding 
18.2-1 Deemed Exports in GST 
 
CGST Act has made provisions of 'deemed exports'. 
 
It appears that benefits similar to physical exports may be grated to them by issue of notification. 
Deemed Exports means such supplies of goods as may be notified under section 147 of CGST Act. 
The Government  may, on the recommendations  of the GST Council,  notify certain supplies  of goods as 
deemed exports, where goods supplied do not leave India, and payment for such supplies is received either in 
Indian rupees or in convertible foreign exchange, if such goods are manufactured in India - section 147 of 
CGST Act. 
As per Explanation  2(b) to section 54 of CGST Act, "relevant date" for filing ref und in case of supply of 
goods regarded as deemed exports where a refund of tax paid is available in respect of the goods, is the date 
on which the return relating to such deemed exports is f iled. 
18.3 Import of goods 
 
"Import of goods" with its grammatical variations and cognate expressions, means bringing goods into India 
from a place outside India - section 2(10) of IGST Act. 
Supply of goods imported into the territory of India, ti l they cross the customs frontiers of India, shall be 
treated to be a supply of goods in the course of inter-State trade or commerce - section 7(2) of IGST Act. 
Warehouse is part of 'customs area' and hence IGST will be payable if sale is made in customs warehouse. 
 
18.3-1 IGST on import of goods 
 
As per section 3(7) of Customs Tariff Act (being introduced w.e.f. 1-7-2017), any article being imported into 
CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
India shall be liable to pay Integrated Goods and Services Tax (IGST) at such rate as is leviable under section 
5 of IGST Act, 2017, on a like article on its supply in India, on the value of imported article on value as 
determined under section 3(8) of Customs Tariff Act. 
As per section 3(8) of Customs Tariff Act (being introduced w.e.f. 1-7-2017), the 'value' will be - (a) Value 
of imported article determined under section 14(1) of Customs Act or tariff value of such article under section 
14(2) of Customs Act (b) duty of customs leviable on that article under section 12 of Customs Act and any 
sum chargeable on that article under any law for the time being in force as an addition to, and in the same 
manner as, a duty of customs, but does not include any tax referred to in section 3(7) or the cess referred to in 
section 3(9) of Customs Tariff Act. 
18.3-2 GST Compensation Cess on import of goods 
 
As per section 3(9) of Customs Tariff Act (being introduced w.e.f. 1-7-2017), any article being imported into 
India shall be liable to pay Good and Service Tax Compensation Cess at such rate as is leviable under section 
8 of GST (Compensation to States) Cess Act, 2017, on a like article on its supply in India, on the value of 
imported article on value as determined under section 3(10) of Customs Tariff Act. 
As per section 3(10) of Customs Tariff Act (being introduced w.e.f. 1-7-2017), the 'value' will be - (a) Value 
of imported article determined under section 14(1) of Customs Act or tariff value of such article under section 
14(2) of Customs Act (b) duty of customs leviable on that article under section 12 of Customs Act and any 
sum chargeable on that article under any law for the time being in force as an addition to, and in the same 
manner as, a duty of customs, but does not include any tax referred to in section 3(7) or the cess referred to in 
section 3(9) of Customs Tariff Act. 
18.3-3 No provision in respect of high seas sale i.e. sale in course of imports 
 
IGST Act or CGST Act make no provision in respect of high seas sale i.e. sale in course of imports. In 
absence  of such specific  provision,  it seems  IGST  will be  payable  if sale  takes  place  within Exclusive 
Economic Zone i.e. within 200 nautical miles inside sea. 
18.4 Rate  of exchange  of currency, other than Indian rupees, for determination of value 
 
The rate of exchange for determination of value of taxable goods or services or both shall be the applicable 
reference rate for that currency as determined by the Reserve Bank of India on the date when point of taxation 
arises in respect of such supply in terms of section 12 or, as the case may be, section 13 of the Act - rule 8 of 
Valuation Rules.