GSTIN Must Be Mentioned in Export and Import Documents

The Central Board of Indirect Taxes and Customs (CBIC) released a circular No.09/2020-Customs on 05 February 2020. The circular states that with effect from 15 February 2020, the Goods and Service Tax Identification Number (GSTIN) declaration would also be mandatory in import/export documents for importers and exporters registered under GST.

In the above circular, the CBIC said that, despite being registered with GSTN, certain cases have come to notice where the importer or exporter have not declared their GSTIN in the bill of entry/shipping bill. Importers and exporters will be required to declare GSTIN in documents as the revenue department continues to crack down on evaders and plug the leakage of goods and services tax revenue.

GSTIN is a unique, 15-digit PAN identification number allotted under GST to each registered person. The importers have to fill in the bill of entry with customs departments while importing goods and exporters have to file the Shipping Bill. The revenue authorities data analytics have found huge tax evasion through the black market and undervaluation of imports.

It has come to light that even though importers pay GST, they deliver the goods without the bill. Typically, importers pay integrated goods and services tax (IGST) on goods they bring to the country. Such tax is supposed to be set-off against the actual GST charged by the end consumer or to claim a refund. 

Also Read: The Saga of Interest on Delayed GST Payments

Although importers pay IGST on imports but do not claim Input Tax Credit (ITC) for the same, this essentially means supplying imported goods to domestic channels without a bill. A similar situation was observed when cess charged on luxury and sin products with companies charging it at the time of purchases but not claiming the credit or setting it off from the final GST paid by customers.

Compulsory capture of GSTIN by importers and exporters would give an adrenaline rush to data analytics, particularly about cross-border transactions, pushing tax authorities to curb border tax evasion practices in the form of undervaluation and re-reporting.

The requirement to include GSTIN in the bill of entry/shipping bill will help to plug GST revenue leakage and ensure that data on import/export is reconciled with GST information. Moreover, exporters were also required to provide details of the state and district of origin of the products along with preferential deals details under which shipping bill exported the goods.

The district/state of origin data will help the government take action to facilitate and promote exports. The need to provide specifics of preferential goods export agreements would assist the government in monitoring the effectiveness of these agreements.

For any clarifications/feedback on the topic, please contact the writer at dvsr.anjaneyulu@cleartax.in