GST on Export of Goods & Services

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As we know, Exports have been the field of focus in all strategic initiatives of the Government for more than 30 years. Now with the Make in India drive, exports continue to appreciate this special treatment because exports should not be burdened with domestic taxes. In this article, we will discuss the GST on Export of Goods & Services.

Before explaining the GST on Export of Goods & Services, now you need to assure some facts about the GST (Goods and Services tax).

Comprehend About GST

The Goods and Services Tax is an indirect tax applied to the supply of goods and services. It is a wide, multistage, destination-based tax: comprehensive because it has subsumed about all the indirect taxes except a few state taxes Though, GST registration is compulsory for registering the Export of Goods & Services.

What is Export of Goods under GST

The Export of goods with its grammatical varieties and associated expressions implies taking goods out of India to a place outside India. Export implies trading or supplying of goods and services outside the domestic territory of a country.

As per IGST Act Section 2(6) Export of services implies the supply of any service when–

  • The supplier of service is located in India
  • The recipient of service is located outside India
  • The area of supply of service is outside India
  • The payment for such service has been received by the supplier of service in convertible foreign exchange
  • The supplier of service and the receiver of service are not merely establishments of a distinct person 

GST on Export of Goods & Services

As per the IGST law, the export of goods are to be considered as “zero-rated supplies” and a person being a registered taxable person exporting such goods shall be entitled to claim the refund of the GST paid under one of the following two alternatives: 

  •  Export of goods or services or both under bond or letter of undertaking (LUT) without spending any Integrated Tax and can petition the refund of unutilized input credit.
  •  Export of goods and service or both on the payment of Integrated Tax and the exporter can allege the refund of the GST paid on such goods and services so exported. 

GST on Liquidated Damages

If you want any other guidance related to GST Registration please feel free to talk to our business advisors at 8881-069-069.

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