The government is planning to address the long-pending issue of providing refunds on goods and services tax (GST) paid by foreign tourists who shop in India.
Let’s understand the news in detail.
GST Refunds for Foreign Tourists Planned in India Next Year”
According to sources, the government will soon begin working on the procedure and rules for refunding GST to foreign tourists who shop in India.
It is expected to implement it early next year.
It is important to note that the Integrated GST Act already allows for GST refunds to foreign tourists for locally purchased items that are taken out of the country.
However, The specific rules and procedures still need to be finalised.
This move is similar to the practice in other countries, where VAT or GST refunds are offered to foreign visitors upon their departure from the country.
Want to learn how other countries are able to provide refunds?
Read our post at: Foreign tourists may soon get GST refund for local shopping
Refunds Implementation Possible as Indirect Tax Regime Stabilised
With the belief that the indirect tax regime has stabilised, the government is considering implementing GST refunds for foreign tourists in India.
This is viewed as one of the final outstanding issues to be addressed.
The proposal will need to be presented to the GST Council for approval before being finalised.
Additionally, a soft launch through a pilot run may be conducted by Central and state GST authorities.
Proposal for Implementing GST Refunds for Foreign Tourists
As part of the pre-Union Budget 2023 recommendations, industry associations have urged the government to take up the issue of GST refunds for foreign tourists.
This move is expected to give a boost to domestic tourism, particularly after the Covid-19 pandemic.
Section 15 of the IGST Act already allows for tax refunds for tourists leaving India for goods taken out of the country.
However, the process for claiming these refunds has yet to be defined.
You must note that. The term ‘tourist’ is defined as a person who stays in India for no longer than six months.
In summary, the Indian government is planning to implement GST refunds for foreign tourists who shop in India, with the specific rules and procedures set to be finalised soon.
This move is seen as a positive step towards boosting domestic tourism, particularly after the COVID-19 Pandemic.
The proposal will need to be presented to the GST Council for approval before being rolled out, and a soft launch through a pilot run may also be conducted
Moreover, If you want any other guidance relating to GST Return Filing please feel free to talk to our business advisors at 8881-069-069.
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