GST on Exports of Service and Goods

For exporting any goods and services the all you need to take IEC code and GST registration and there is no of  compliance requirement on the part of IEC code only IEC code is required, you only need to comply GST compliance.

 

A guidance note relating to the above issue was released by the Indian government which has helped in clearing doubts regarding the claim of input tax credit on zero-rated exports. An exporter dealing in zero-rated (exports of goods and services) under GST can claim a refund for zero-rated supplies as per the following options:

Option 1: Supply goods or services, or both, under bond or Letter of Undertaking, subject to such conditions, safeguards and procedure as may be prescribed, without payment of integrated tax ( no need to pay GST over goods and services), and then claim a refund of unutilised input tax credit.

The exporter needs to file an application for refund on the common portal either directly or through the facilitation centernotified by the GST commissioner. An export manifest or report has to be filed under the Customs Act prior to filing an application for refund.

Option 2: Any exporter  as specified in section 55 who supplies goods or services, or both, after fulfilling certain conditions, safeguards and procedures as may be prescribed; and paying the IGST, can claim refund of such tax paid on the supplied goods or services, or both. The applicant has to apply for the refund as per the conditions specified under section 54 of the CGST Act.

An exporter is required to file a shipping bill for the goods being exported out of India. In this case, the shipping bill is considered as a deemed application for refund for the IGST paid. It would be deemed to have been filed only when the person in charge of the shipment files the export manifest or report, mentioning the number and date of the shipping bills.

Electronic as well as manual shipping bill formats are amended by the department to include GSTIN and IGST. The modified forms are available on the official department website. The Department is also in the process of relaxing the factory stuffing procedure and necessary permissions, to give a boost to the Indian export industry under GST.

Deemed Exports

The supply of goods or services to the following would be treated as exports under GST

  1. Supply of goods by a registered person against Advance Authorisation
  2. Supply made to an Export oriented undertaking (EOU) or Hardware Technology Park unit, Software Technology Park unit, Biotechnology Park unit
  3. Supply of capital goods by a registered person against Export Promotion Capital Goods Authorisation
  4. Supply of gold by a bank or Public Sector Undertaking against Advance Authorisation as per Customs law

Filing of returns under GST for the deemed export is to be done as per the general procedures provided for export under GST.

Documents Required for Claiming Refund on Exports

Here is a list of documents required for claiming refund –

1. Copy of return evidencing payment of duty

2. Copy of invoice

3. Document proving that the burden of paying tax has not been passed on (CA certification or self-certification).

4. Any other document required by the government.

Conclusion

With GST in place, the export industry in India would be able to have internationally competitive prices due to the smooth process of claiming input tax credit and the availability of input tax credit on services.

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