Duty Credit Scrips: Accounting and GST for a Sale or Purchase
A scrip trade is simple to book once you know two things: the sale of the scrip itself is GST-exempt, and the only GST in the transaction is on the service fee. Here is how to record a sale or a purchase cleanly, what the invoice shows, and the one nuance buyers should watch.
The two facts that make scrip accounting simple
Almost all the confusion about scrip accounting dissolves once you hold two facts. First, duty-credit scrips are GST-exempt on transfer under HSN 4907, so selling or buying the scrip does not attract GST on the value of the scrip. Second, the only GST in a ScripX trade is on the service fee, at 18%, and that fee is charged only when a trade settles. Everything else is bookkeeping around those two points. The GST on duty-credit scrips guide covers the exemption in more depth.
Booking a scrip sale
For a seller, a scrip sale realises the value of an asset the government issued you. You receive the sale proceeds, net of the ScripX fee, into your bank by IMPS with a UTR the same business day. The proceeds are the consideration for transferring the scrip; the fee is a deductible service cost with GST on it. Because the scrip sale is exempt, there is no output GST to charge the buyer on the scrip value itself. Your records are the GST invoice on the fee and the net-realisation statement, which shows the price, the fee, and your take-home in one place.
Booking a scrip purchase
For a buyer, a purchase is the acquisition of a duty-credit asset you will apply against customs duty. You pay the scrip price plus the buy-leg spread; the scrip value is GST-exempt, and GST applies only to the fee component. When you later apply the scrip against a Bill of Entry, it discharges duty at face value, which is where the saving is realised. The Duty-Pay guide covers applying a scrip against a Bill of Entry.
The invoice and net-realisation statement
Every settled ScripX trade ships two documents your finance team will want. A GST invoice for the ScripX fee, showing the 18% GST clearly, and a net-realisation statement that lays out the scrip's price, the fee, and the net amount that reached you. Together they turn a trade into an auditable pair of records rather than a bank line and a screenshot. For a buyer covering a Bill of Entry, the same trade also produces an audit pack showing the duty covered and the scrips applied.
The input-tax-credit nuance
Here is the point worth reading carefully. Because the scrip itself is GST-exempt on transfer, there is no GST on the scrip value for either party to claim as input tax credit; there is nothing to claim on an exempt supply. The GST that does exist sits on the ScripX service fee, and whether that is available to you as ITC depends on your own GST position and the use of the service, which is a matter for your accountant against your registration, not a blanket rule. Do not expect ITC on the scrip value, because there is none; the only GST in play is on the fee. If your accountant needs the primary source, it is the HSN 4907 exemption under Notification 02/2017.
Why the exemption matters to your margin
The HSN 4907 exemption is not a technicality; it is part of why scrips are worth trading. If the scrip transfer itself carried GST, the gap between what a scrip costs and the duty it discharges would narrow and the trade would be less worth doing. Because the transfer is exempt and only a small fee carries GST, the economics stay clean: an exporter turns idle credit into cash, and an importer pays duty for a little less. Keeping the accounting straight is how you keep that saving from leaking back out in confusion.
Where to go from here
For the exemption itself, read GST on duty-credit scrips; for what a trade costs before tax, the pricing page walks a worked example. To realise a scrip's value, a single Sell Now offer; to apply one against duty, cover a Bill of Entry with scrips. See how ScripX works for exporters.
Frequently asked questions
Is GST charged on selling a duty-credit scrip?
No. Duty-credit scrips are GST-exempt on transfer under HSN 4907, so the sale of the scrip itself does not attract GST on the scrip value. The only GST in a ScripX trade is 18% on the service fee, and that fee is charged only when a trade settles.
How do I book a scrip sale in my accounts?
Record the sale proceeds, net of the ScripX fee, that reach your bank by IMPS with a UTR the same business day. The scrip sale is GST-exempt, so there is no output GST on the scrip value; the fee is a service cost with 18% GST. Your supporting records are the GST invoice on the fee and the net-realisation statement.
Can I claim input tax credit on a scrip I buy?
There is no GST on the scrip value to claim, because the transfer is exempt under HSN 4907. The only GST is on the ScripX fee, and whether that is available to you as ITC depends on your own GST position and the use of the service. That is a matter for your accountant against your registration, not a blanket rule.
What documents do I get for a scrip trade?
Every settled trade ships a GST invoice for the ScripX fee and a net-realisation statement showing the price, the fee, and your take-home. A buyer covering a Bill of Entry also gets an audit pack showing the duty covered and the scrips applied.
