After GST roll out in India, under “Make in India” policy, the Indian Government aimed to increase the output and quality of exports from India and gave many tax benefits to exporters.
Meaning of Export of Goods and services
- Export of goods means taking goods out of India to a place outside India.
- Export of Services means when the supplier of service is located in India and the place of supply of service is outside India.
Treatment of Exports under GST
- Export of goods or services are treated as Zero rated supply i.e., the goods or services exported shall be relieved upon them either at the input stage or at the final product stage.
- Export of goods or services are treated as inter-state supply in course of business
Features of the scheme of Export under GST
- The goods and services can be exported either on payment of IGST which can be claimed as a refund after the goods have been exported or under Letter of Undertaking (LUT) without payment of IGST.
- In case of goods and services exported under LUT, the exporter can claim a refund of accumulated ITC on account of export
- The shipping bill filed with the customs is treated as an application for refund of IGST and shall be deemed to have been filed after submission of export general manifest and furnishing of a valid return in Form GSTR-3 by the applicant.
Place of Supply in case of Export of Goods
The Place of supply in case of export of goods is the place where the goods have been exported i.e., a destination outside India
The Place of supply of Services in case of either location of buyer or receiver is outside India is governed by Section 13.
Deemed Exports refers to those transactions in which goods supplied do not leave the country and the payment for such supplies is received either in Indian Currency or in Free foreign exchange.
Filing of Refund Application
Any person claiming a refund on the export of goods or services may make an application of refund before the expiry of 2 years from the relevant date.
The refund application should be filed within 2 years from the date on which return relating to deemed exports.
Conditions to be satisfied for a service to be classified as Export of Service
- Supplier of Service should be located in India and place of supply of service is outside India.
- Recipient of service is located outside India.
- Payment for such service should be received in convertible foreign Exchange.
- Supplier of Service and receiver are not merely establishments of a distinct person.
Scrips utilization for payment of GST
The scrips cannot be utilized for payment of IGST and compensation Cess. Similarly, scrips cannot be used for payment of CGST, SGST / UTGST or IGST for domestic procurement.
If you are in the Export / Import business need guidance on GST and efficient management, speak to Team EZTax.in by Phone @ 7288 900 900 or Online chat @ https://eztax.in