In few cases, the officers issued SCNs demanding that the credits relating to the purchase of all inputs should be reversed on the logic that the inputs/goods which have been used for exports of goods have been used for earning DCS. The department has raised these demands on the ground that sale of DCS being an ‘exempt’ supply require reversal of Common ITC availed in relation to DCS. In recent times, Tax Departments started issuing notices to reverse input tax credit (‘ITC’) under Rule 42 of CGST Rules along with interest. Section 17 (6) of CGST Act specifies that in such cases, procedure prescribed under CGST Rules (Rule 42 in case of inputs and input services and Rule 43 in case of Capital Goods) needs to be complied. Section 17(2) of the CGST Act, 2017 (“CGST Act”), which provides that where the goods or services or both are used by a registered person partly for effecting taxable supplies including zero-rated supplies and partly for effecting exempt supplies, the amount of credit shall be restricted to so much of the input tax as is attributable to the said taxable supplies including zero-rated supplies. 122A of Notification 2/2017 – CGST (Rate). Duty Credit Scrips covered under HSN 4907 and exempted from under S.

Scrips can be freely traded and transferable i.e., Exporters who are able to use the same for their own consumption use the same and exporters who are not able to use for their own consumption, can sell the same to another person.ĭuty Credit Scrips are goods as held by many Courts and the supply of the same liable to GST. It cannot be utilised for payment of GST.

The duty credit scrips can be utilised to pay customs duties on import of inputs or goods, safeguard duty, anti-dumping duty and any other customs duty under FTP 2015-20. Under the FTP 2015-20, MEIS/SEIS/RoDTEP Schemes intends to incentivise exports of goods manufactured in India or produced in India or exported from India.

Duty Credit Scrip (DCS) is an incentive scheme which is an export promotion benefit offered by the Government of India under the Foreign Trade Policy (FTP) 2015.

Kuar schedule