GST Refund on Export

The Input Tax Credit on the inputs used for producing the goods or rendering the services can be claimed by the exporters. For the GST Refund on Export, the goods and services must be provided to the customers without charging the GST on the same. But all such benefits given to the exporters are available based on certain prescribed safeguards, procedures and conditions. In the past there have been cases where GST Refunds were denied on export of goods and services. Exporters facing difficulty in claiming GST Refunds, has not been a new phenomenon. In this article we will be elaborating everything about GST Refund on Export for better understanding.

Conditions for a supply to be qualified as an export:

A supply of goods or service or both are considered as export for the purpose of GST Refund on Export in the following cases-

·         Supplied goods are considered as exports when the place of supply is outside the Indian Territory.

·         In case of exported goods, repatriation of convertible foreign exchange is not mandatory as per the GST Laws.

·         In case where the services supplier is located outside India.

·         Place of supplied services is outside India.

·         When the recipient of the exported service is located in foreign countries.

·         The payments for such supplied services have been received in convertible foreign exchange by the supplier.

·         Where the recipient and the supplier of the services are not considered merely as establishments of distinct person. 

 

GST Refund on Export:

For the purpose of claiming GST Refund on Export, certain conditions must be fulfilled by the taxpayers and exporters. As per the vide Notification no. 10/2017 for Integrated Tax, it has been stated by the Indian Government that it is mandatory for every exporter having an aggregate turnover of Rs.20 Lakh and above to have GST Registration.

If the exporter is dealing in zero-rated supplies, then they are eligible for making application for GST Refund on exports. They must fulfill the two conditions as prescribed by the GST Laws-

·         The exporter must supply goods or services or both under a Letter of Undertaking (LUT) or bond.

·         The goods or services or both supplied by the exporters must be as per the conditions, safeguards and procedures prescribed in the CGST Act, 2017.

 

Related Article: GST Refund can now be claimed for 2 financial years

Requisite documents for GST Refund on Export: 

·         In case of exported goods-

(i)                  No separate application for GST Refund on Export of goods and the IGST paid on them is required.

(ii)                The Export General Manifest (EGM) and the shipping bill filed by the exporters are considered as a refund application.

(iii)               The exporter claiming the refund must have filed a valid GSTR-1 and GSTR-3B.

·         In case of exported services-

(i)                  The exporter is required to attach the Foreign Inward Remittance Certificate (FIRC) or Bank Realization Certificate (BRC) along with the application made for claiming GST Refunds in case of exports.

(ii)                The bank must issue the FIRC for each and every inward remittance that have been received against the exports.

(iii)               BRC is to be issued by the bank for each and every invoice, to be attached with the application GST Refund on Export.