In India, the GST for the export of goods and services is zero-rated. Here, a zero-rated supply does not suggest that the goods and services have a tax rate of zero percent. In fact, it means that the recipient of the supply of goods or services or both is entitled to pay 0% GST to the supplier of goods or services or both. The government of India has the aim of growing the output and the quality of exports from India and the various tax benefits furnished to the exporters. GST rolled out on July 1 and yet there may be still some ambiguity among the exporters on the feasible impact of the new regime on this industry. Traders may wish to know how GST will affect the goods exported, and the quantity of tax paid on the raw material/input used. Therefore, to clear such confusion, the government of India has shared notifications and guidelines for the public with regard to the applicability of CGST, SGST, UTGST, Cess as well as GST rates. In this post, we will help you understand the GST Impact On the Export of Goods and Services.

How GST is Imposed on Export of Goods and Services

A duty drawback was provided under the previous laws for the tax paid on inputs for the export of exempted goods. Claiming the duty drawback changed into a bulky process. In GST, the duty drawback will only be available for the customs duty which was paid on imported inputs or central excise paid on some petroleum or tobacco products used as inputs or fuel for captive power generation. There was, however, confusion surrounding the refund of the tax paid through exporters at the inputs.

So, a note in relation to the above challenge was released by the government of India which has helped in clearing doubts concerning the claiming of input tax credit (ITC) on zero-rated exports. An exporter dealing in zero-rated goods under GST can claim a refund for zero-rated supplies as per the subsequent options, which are given as follows:

Option 1: This includes the supply of goods or services or both, under bond or Letter of Undertaking (LUT), subject to such conditions, safeguards and process as may be prescribed, without payment of incorporated tax and then claim a reimbursement of non-utilised input tax credit. The exporter is required to file an application for refund on the common GST portal, either directly or via the facilitation centre notified by the GST Commissioner. An export manifest or report needs to be filed under the Customs Act prior to filing an application claiming for refund.

Option 2: Any exporter or United Nations or Embassy or other agencies/bodies as specified in Section 55, who supplies goods or services or both, after fulfilling certain criteria, safeguards, and procedures as may be prescribed and paying the IGST, can claim a refund of such tax paid on the provided goods or services, or both. The applicant is required to apply for the refund as in keeping with the conditions that are detailed under Section 54 of the CGST Act.

An exporter is needed to file a shipping bill for the goods being exported out of India. In this case, the shipping bill is taken into consideration as a deemed application for a refund for the IGST paid. It might be deemed to have been filed best while the individual in charge of the shipment files the export manifest or report, mentioning the unique number and date of the shipping bills. Electronic as well as manual shipping bill formats are amended via the department to include GSTIN and IGST. The modified forms are available on the official department website. The department is also on the verge of relaxing the factory stuffing procedure and important permissions, to offer a boost to the Indian export industry under GST.

Deemed Exports

The supply of goods or services to the ones mentioned below could be considered as exports under the GST regime:

• Supply of goods through a registered individual in opposition to Advance Authorisation
• Supply made to an Export Oriented Undertaking (EOU) or Hardware Technology Park unit, Software Technology Park unit, Biotechnology Park unit
• Supply of capital goods via a registered person against Export Promotion Capital Goods Authorisation
• Supply of gold through a bank or Public Sector Undertaking in opposition to Advance Authorisation as in line with Customs law

Filing of returns under GST for the deemed export is to be executed as consistent with the general procedures supplied for export under GST.

Documents Required for Claiming Refund on Exports

Given below is a list of important documents that are required for claiming refund:

• A copy of return that holds evidence for the payment of duty.

• A copy of invoice.

• Any document which proves that the burden of paying tax has not been passed on (such as CA certification or self-certification).

• Any other document that is required by the government of India.

GST on the Export of Goods from India

What is export of goods within the context of GST?

Export of products in easy terms method taking goods out of India to an area outside India. Export of goods is considered as inter-country supply and underneath GST law, GST registration turns into obligatory for any person who is carrying out the inter-state taxable supply of goods.

Is GST registration necessary for export of goods?

Yes, it’s far obligatory in an effort to take GST Registration in case you are an exporter of goods. Irrespective of the limit of your turnover, it will become mandatory to take new GST registration for an exporter of goods.

Do I have to pay GST at the same time as I sell goods outside India?

If you are registered as an exporter of goods under GST, then you must understand that considering export is considered as interstate delivery so that you want to pay IGST in case of export of goods. However, the amount of IGST paid in case of export of products can be claimed as refund by way of the exporter with the aid of following a certain procedure as prescribed by the Government. Another opportunity that an exporter of products has- that he can follow for a Letter of Undertaking (LUT). Thus, with the help of LUT, an exporter of products can make the export without paying any IGST.

Common yet Vital Factors for Exporter of Goods and Services

What are the important compliances to acknowledge as soon as my GST Registration system is completed?

Once you have acquired a new GST registration, you will be assigned a number, which is referred to as GSTIN (Goods and Services Tax Identification Number). Now you’re registered under GST. Filing GST return is mandatory for you.

What is the compliance of GST return submitting in case of exporter of goods or services?

GST return filing is mandatory even if you have to pay zero taxes or maybe if your business isn’t always doing operation currently. Because once someone is registered under GST, it will become obligatory that such GST registered person files his/her GST returns according to the prescribed due dates which are issued with the aid of the government of India.

What are the results for the late filing of return or no filing of return under GST for the export of goods or services?

You will need to pay penalty and interest for most of these non-compliances. It is your tax consultant’s duty to ensure that your commercial enterprise files his/her GST return on or before the due date and that there is zero non-compliance from you.

How to Apply for LUT?

In order to apply for a Letter of Undertaking (LUT) online, you will need to login to the GST portal. Here are the easy steps on how to report supply LUT in GST. To practice LUT, right here is what you need to follow:

1. Log in to the official GST portal of the government of India https://gst.gov.in.
2. Click User Service from the top menu.
3. Click on the Furnish Letter of Undertaking (LUT) link.
4. Fill the form according to the instructions given.
5. Submit the form along with EVC or DSC.

Can Online GST Return Filing be Self-Filed?

Yes. Filing GST returns online yourself is the right element to do best when you have technical knowledge on GST laws. Otherwise, you have to go to a professional Chartered Accountant (CA) who can file your GST return accurately.

GST on the Export of Services from India

What is the export of services in the context of GST?

The export of services implies a case wherein the region of supply of service is outside India and the person receiving such services is outside India, while the issuer of the services is located in India.

Is GST registration required if I am an exporter of services?

Yes. The export of goods is considered as inter-nation deliver and under GST law, new GST registration becomes obligatory for any individual who is carrying out the inter-state taxable supply of goods. Unlike in the export of goods, the export of services is exempt from GST registration for a threshold of up to INR 20 lakhs.

Do I need to pay GST at the same time as I trade services outside India?

If you are registered under GST as an exporter of services, then you must recognize that the export is considered as inter-state supply. So, you are required to pay IGST in case of export of services. However, the amount of GST paid in case of export of services may be claimed as a refund by the exporter by following a certain system as prescribed by the government of India. Another alternative that an exporter of services has is that he/she can request for a Letter of Undertaking (LUT). By taking LUT, an exporter of services can make the export without paying any IGST (Integrated Goods and Services Tax).

What is the GST Registration technique for exporter of services in India? Is online GST registration possible?

There is the facility of GST registration online provided on the government of India portal, which is https://www.gst.gov.in/.

One can acquire the files first then apply it via following the instructions given at the website. There is a threat that if you document it yourself you might get a note from the GST department for any error you may make whilst submit the application of GST registration.

If I have not crossed the brink limit, however, I took GST registration as an exporter of services. In this case, do I need to confirm with the GST return filing norms?

Yes, once you have successfully completed GST registration, filing GST return is deemed mandatory for you.

Conclusion

With GST in place, the export enterprise in India might be capable of having internationally competitive prices due to the smooth process of claiming input tax credit and the provision of an input tax credit on services.