Exporting goods and services upon payment of Integrated Goods and Services Tax (IGST) is a better option for businesses that are engaged in the export of goods and services under the Goods and Services Tax (GST) regime.
Under the GST law, exports of goods and services are considered as "zero-rated supplies," which means that the supply of goods and services for exports is taxable at a rate of 0%. This implies that businesses that export goods or services are not required to pay any tax on such supplies. However, to claim this exemption, the exporter needs to follow certain procedures and fulfill specific conditions under the GST law.
One of the options available to exporters is to make the export supply upon payment of IGST. This means that the exporter can pay IGST on the export of goods or services and claim a refund of the same at a later stage. The advantage of this option is that it eliminates the need for the exporter to follow the lengthy procedures involved in claiming the refund of the input tax credit (ITC) accumulated on the inputs used for the export supply.
However, it is important to note that the exporter needs to comply with the relevant rules and regulations of the GST law to claim the refund of the IGST paid. The exporter needs to file a refund application within the prescribed time limit and furnish the required documents to support the claim for refund.
In conclusion, exporting goods and services upon payment of IGST is a better option for businesses engaged in exports, provided they comply with the necessary procedures and conditions under the GST law.
IGST stands for Integrated Goods and Services Tax. It is a type of tax that is levied by the Indian government on the supply of goods and services that are carried out between different states or union territories in India. IGST is applicable when the transaction involves the movement of goods or services from one state to another or from a union territory to a state or vice versa.
IGST is a part of the Goods and Services Tax (GST) system in India, which is a comprehensive tax levied on the supply of goods and services throughout the country. Under the GST regime, the taxes levied by the central and state governments have been subsumed into a single tax, which is the GST.
The IGST collected by the government is divided between the central and state governments in a manner prescribed by the GST Council, which is the apex decision-making body for the GST system in India. The IGST is designed to ensure that the tax revenue is shared equitably between the central and state governments, regardless of the origin or destination of the supply of goods and services.
Exporters can choose to export goods and services upon payment of Integrated Goods and Services Tax (IGST) to claim a refund of the tax paid at a later stage. To claim the refund of the IGST paid, the exporter needs to comply with the following conditions:
1. The exporter should have a valid Goods and Services Tax Identification Number (GSTIN).
2. The exporter should have an active Goods and Services Tax (GST) registration.
3. The exporter should have filed all the due GST returns for the preceding period.
4. The exporter should have paid all the due GST liability for the preceding period.
5. The exporter should have a valid Export Promotion Council (EPC) registration, if applicable.
6. The exporter should have the necessary documents to support the export transaction, such as a valid invoice, shipping bill, bill of lading, and other relevant documents.
7. The exporter should file a valid refund application within the prescribed time limit.
It is important to note that the exporter needs to comply with all the relevant rules and regulations of the GST law to claim the refund of the IGST paid. Any non-compliance with the rules may lead to delays in the refund process or denial of the refund claim.
In conclusion, exporters can choose to export goods and services upon payment of IGST to claim a refund of the tax paid. However, they need to fulfill the necessary conditions and comply with the prescribed procedures under the GST law. It is advisable for businesses engaged in exports to consult with a qualified tax professional for detailed advice on the GST provisions and procedures applicable to their specific circumstances.
Here are some frequently asked questions (FAQs) about exporting goods and services upon payment of Integrated Goods and Services Tax (IGST) under the Goods and Services Tax (GST) regime:
A: IGST is the tax levied on the supply of goods and services that are carried out between different states or union territories in India.
A: Exporting goods and services upon payment of IGST eliminates the need for the exporter to follow the lengthy procedures involved in claiming the refund of the input tax credit (ITC) accumulated on the inputs used for the export supply.
A: The exporter needs to comply with the relevant rules and regulations of the GST law to claim the refund of the IGST paid. The exporter needs to file a refund application within the prescribed time limit and furnish the required documents to support the claim for refund.
A: The refund of IGST paid on the export of goods or services can be claimed either through the electronic credit ledger or by filing a refund application. The time taken to get the refund depends on the processing time taken by the authorities to verify the refund claim and process the refund.
A: No, an exporter cannot claim a refund of the IGST paid if the export goods or services are exempted from GST. However, if the export is made to a Special Economic Zone (SEZ) or a developer of the SEZ, the exporter can claim a refund of the IGST paid on the export supply.
It is important for businesses engaged in exports to consult with a qualified tax professional for detailed advice on the GST provisions and procedures applicable to their specific circumstances.
Determination of tax & adjudication of demand– Sec 73 CGST Act, 2017
Whether Voluntary payment of GST penalty takes away right of Appeal?
Constitutional Challenges of GST: A Perspective
