Historically, India has been a major exporter to the international market. Our Indian economy and GDP are growing at a quicker rate as a result of new laws in India that encourage exports. Furthermore, if you want to start export business in India, you can avail several benefits from the government after getting necessary registrations and licenses. Even if you are exporting services, you will need GST Registration as the government has made GST Registration mandatory for export of services in India.
What is GST and GST Registration?
GST stands for goods and services tax. It is an indirect taxation system in India. Thus, eligible businesses need to enroll under GST and collect taxes from their customers and then submit it to the government.
Thus, GST Registration is the process through which you can register your business under GST. After getting GST Registration, you will get a unique GSTIN and other details which you will have to use for GST Return Filing.
All taxable persons whose turnover exceeds the exemption limit of Rs.20 Lakhs (Rs.10 Lakhs in special cases) need to have GST Registration.
However, GST Registration is also mandatory for export of services in India regardless of the turnover.
Know about Export of Services under GST
GST Regime defines Export of Services as follows:
- Supplier is located in India and the service recipient is located outside of India
- Place of Supply of Service is outside of India
- Supplier of Service receives the payment in convertible foreign currency or Indian Currency
- According to Explanation 1 in Section 8, neither the service provider nor the service user are solely the establishments of a single individual.
Is GST Registration Mandatory for Export of Services in India?
Yes, GST Registration is mandatory for export of services in India. According to a government FAQ released on Twitter and dated December 22nd, 2017, export services are interstate taxable supplies and must have GST Registration.
Classification of Export of Service under GST Regime
Export of services or products is classed as a “zero-rated supply” under Section 16 of the IGST Act. As a result, it is not an exempt category. Zero-Rated Supply is also applicable to supply of export services to Special Economic Zones.
Documents Necessary for Exporters to Claim a Refund
- Invoice Copy
- Copy of Document of Payment of Duty
- CA Certification that tax liability is not passed
- Other Document as per Government Requirement
Furthermore, taxpayers must furnish Letter of Undertaking to export services without paying Integrated Goods and Service Tax (IGST).
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