As an Indian business owner or startup founder looking to export goods to Nepal and Bhutan, you need to be aware of the various tax implications and regulations governing such transactions. The primary tax applicable to exports to these neighboring countries is the Goods and Services Tax (GST), which is a value-added tax levied on the supply of goods and services in India. In this article, we will answer some critical questions related to GST and exports to Nepal and Bhutan.
Exporters to Nepal and Bhutan need to obtain GST registration as per the GST regulations. If you are already registered under GST, you can use the same registration for exports as well. However, if you are not registered under GST, you need to complete the registration process and obtain a GSTIN (GST Identification Number) before exporting to these countries.
Exporters need to follow specific procedures and documentation while exporting goods to Nepal and Bhutan. Some of the essential documentation required for exports include:
It is important to ensure that the documentation is accurate and complete to avoid any delays or penalties in the export process. The exporter also needs to declare the export of goods in the GST portal using the export invoices.
Export of services to Nepal and Bhutan is also subject to GST. Service exporters need to obtain GST registration and comply with the GST regulations. The documentation required for export of services includes:
Service exporters also need to declare the export of services in the GST portal using the export declarations.
Exporters can also export goods to Nepal and Bhutan under bond or LUT to avoid payment of GST at the time of exports. Under this scheme, the exporter needs to furnish a bond or LUT with the GST authorities and follow specific procedures for exports. The bond or LUT is valid for one year and needs to be renewed every year.
Exporters to Nepal and Bhutan need to comply with the GST regulations and follow the necessary procedures and documentation for exports. Obtaining GST registration, accurate documentation, and proper declaration of exports in the GST portal is crucial to avoid any delays or penalties in the export process. The bond or LUT scheme is also an option for exporters to avoid payment of GST at the time of exports.
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