GST Notifies section 123 of the Finance Act 2021 to be in force from 1st Oct 2023 – Change in Section 16 of IGST Act, related to Zero rated supply
Section 16 of the IGST Act, which defines the Zero Rated Supply and provides option to exporter to export either under LUT or under Paid IGST option was proposed to be amended in Finance Act, 2021. However, the date of its implementation was never announced.
Now, vide Notification No. 27/2023-Central Tax, dated 31.07.2023 the said provisions which was sec. 123 of the Finance Act, 2021 is notified to be applicable from 01st Oct 2023.
Based on this change, section 16 (3) would be amended where all exports will be under LUT only.
A New sub section (4) under section 16 is also added where the council would recommend class of persons who can make Zero Rated Supply under payment of IGST and claim refund.
GST has notified this class/goods as well under Notification No. 01/2023-Integrated Tax dated 31.07.2023
where all goods or services are both can be exported under IGST payment except for 25 Products mentioned in this notification.
Thus, currently based on this two notification, inspite of the change in the main law, Exporters will have no major impact on claiming export refund under LUT or Paid IGST even after 01.10.2023.
It must be however, noted that GST and Govt. can keep amending this list and may in future stop or allow products or class of people to claim IGST refund for Zero Rated Supply.
Both the Notifications can be downloaded from the link below:
1. Notification No. 27/2023-Central Tax, dated 31.07.2023
https://taxinformation.cbic.gov.in/view-pdf/1009805/ENG/Notifications
2. Notification No. 01/2023-Integrated Tax dated 31.07.2023
https://taxinformation.cbic.gov.in/view-pdf/1009814/ENG/Notifications
