The export activity serves as the key driver for the promotion of the economic growth of any nation. Thus, exports remain on the Government’s priority list and also remain the focus area in formulation of the several of the policy initiates of the Government over the past several decades. Also, according to the Indian tax regulations, the export activity is continuing to enjoy specialized treatment which will include the inclusion of the seamless refund claims against the activity of exports.
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Under the Goods & Services regulations, the GST exports are considered zero-rate supplies. Thus the exporters are in the position of claiming the GST paid refund for the procurement under two of the conditions mentioned below:
These types of refunds are subjected to some of the restrictions along with safeguards being prescribed under GST law
In India, goods & service exports are considered as the interstate supply and thus, it is subjected to integration with the GST. However, according to the provisions of the IGST law, the goods & services export is termed as the zero-rated of the supplies, and thus it facilitates the exporter to claim the GST refund upon the exports .
Although the goods & services supplied beyond geographical boundaries attract 0% of the GST, & thus it is mandatory from the side of the exporter to conduct the registration under the GST, When the aggregate the turnover exceeds GST threshold of 40 lakhs, 20 lakhs for states of special category) as per the specifications within the notification no. 10/2017 of the Integrated tax.
However, the criteria that have it included within the IGST regulation are meant for the promotion as well as the facilitating of export growth within the country. But if the exporter intends to avail of the benefits, there are certain eligibility conditions that he/she is required to fulfill:
Any of the registered taxable individuals, apart from the ISD( Input Service Distributor), TDS Deductor, Compounding payer & TCS collector will be claiming the refund for all the taxes that are being paid upon the exports, when the goods/ services that have been supplied are meeting the conditions mentioned below:
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The ICEGATE system will provide payment information when the refund payment gets credited to the account of taxpayers along the GST portal will transmit all the taxpayer’s details through SMS or email.
ITC can be availed by a registered exporter after furnishing FORM GSTR-23. Some of the documents required are:
Invoice will be issued through the good’s supplier, according to GST, section 31 provisions.
Issuance of debit note( through supplier).
Entry billings.
Issuance of documentation through ISD( Input service distributor) as per provisions of GST.
The registered exporter can avail of the returns by filling out FORM GSTR-2. Here is the documentation which is needed for the same:
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The LUT( letter of undertaking) is the documentation which is filed by the exporter facilitating the products exports, without paying IGST, under the circumstances when the export conditions are satisfied.
As per the notification no. 37/ 2017,
Central tax, filing LUT for the goods & services export is compulsory. When the exporter is not having LUT, then he/she is required to make payment of GST.
According to the Central GST introduced in the year 2017, in case the exporter intends to export the items, then it is mandatory to submit a letter of undertaking. This will facilitate the claim of the GST refund. Upon filing, the LUT will be held validity for the specific financial year.
Thus, unlike the procedure for refund, the exporter is not required to go through all the procedural needs, during each & every time the export consignment is being conducted. The filing of the same could be done on the GST portal.
Here is the stepwise procedure for the GST refund on the export of goods & services:
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