Forex Accounting and Auditing (Import/Export Firms)
Foreign exchange accounting or FX accounting is a financial concept to define the corporate treasurers’ exercise consisting of reporting all the company’s transactions in currencies different than their functional currency.
Import Export Accounting
Accounting for import export. … – After arrival of goods, the importer pays the customs duty and taxes to customs department. – All clearance work is done by clearing agent. – On imported goods arrival, loading and unloading charges are paid by importer. The accounting of such transaction is know as Import Export Accounting
IMPORT AND INPUT TAX CREDIT
- All the Importers/Exporters have to mandatorily declare GST Registration number (GSTIN) along with Import Export Code (IEC) in the bills of entry, Shipping bills and Courier forms.
- Provisional IDs issued by GSTIN can be declared during the transition period. However, Importers and Exporters are advised to complete their registration process for GSTIn.
- Input credit of IGST would be available based on GSTIN declared in the bill of entry.
- Custom EDI system would be GST ready by 1st July’2017 and all out efforts are being made for smooth transition.
- Customs EDI system would be interconnected with GSTN for validation of Input Tax Credit.
- Bill of entry data in non-EDI locations would be digitized and used for validation of input tax credit data provided by GSTN.
EXPORT, REFUNDS, DRAWBACK, EXPORT PROMOTION SCHEMES, SEZ AND EOUs
- Exports are zero-rated supplies under GST law. Exporter would be entitled to refund of IGST paid on exports or refund of accumulated input tax credit on inputs used towards exports. Refund of IGST for exports would be based on GSTIN declared in the shipping bill.
- Drawback Scheme would continue. New Drawback Schedule would be released before 1st July’2017.
- Extant Duty Drawback scheme shall continue for three months from the date of introduction of GST as part of transition to GST.
- Imports from SEZ to domestic tariff area would attract IGST from 1st Juy’2017.
- 100% Export oriented units would attract IGST on imports from 1st July’2017.
- EXIM Scrips can not be used for payment of IGST and GST Compensation Cess in imprts and CGST, IGST and GST Compensation Cess for domestic procurement.
- Import under Advance Licenses and Export Promotion Capital Goods Scheme (EPCG) are not exempted from payment of IGST and GST Compensation Cess.