Thursday, August 3, 2017

Circular 1/2017 (compensation cess)- Zero rated supply for the purpose of Compensation Cess on exports

In order to clarify the applicability in those instances where exports which are ZERO rated whether to discharge compensation cess as per its applicability on the goods/ services so exported, a circular in this regards have been issued.

Complete circular can be accessed by using the link http://www.cbec.gov.in/resources//htdocs-cbec/gst/compnsation-cess-circu1.pdf dated 26 July 2017

Below are some pointers-

1- Whenever there is ZERO rated supplies and the duties have been paid on such exports together with its applicable compensation cess (if the items attract cess), then the full amount of duty alongwith cess so paid will be REFUNDED,

2- When such ZERO rated supplies have been made using BOND then no question of compensation cess so paid, however if there are any inputs on which cess and duties have been paid will then be REFUNDED back as per IGST provision related to such ZERO rated supplies..

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