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Published on:
February 23, 2023
By
Paramita

A Short Practical Note for Exports under GST Regime

The Goods and Services Tax (GST) regime has brought about significant changes in the taxation system of India. With the introduction of GST, exporting goods and services from India has become easier and more streamlined. In this article, we will discuss the practical aspects of exports under the GST regime.

Understanding Exports under GST

Export of goods and services is a crucial aspect of any economy. In the GST regime, exports are treated as zero-rated supplies. This means that the exports of goods and services are taxed at 0%, and the input tax credit (ITC) on the inputs used for the exports is available to the exporter. The exporter can use the ITC for payment of taxes on the domestic supplies or for claiming a refund of the accumulated input tax credit.

It is essential to note that the exporter needs to comply with certain procedural formalities to claim the ITC.

Export of Goods

Export of goods under GST is defined as taking goods out of India to a place outside India. The exporter needs to follow the following procedure:

  1. The exporter needs to obtain an Export Invoice from the buyer.
  2. The exporter needs to file a Shipping Bill, which is a document containing details of the goods to be exported. The Shipping Bill needs to be filed with the Customs department. The exporter also needs to obtain an Export General Manifest (EGM) from the Shipping Line or the Airline.
  3. The exporter needs to file a GST declaration in Form GSTR 3B, which contains the details of the export transaction.
  4. The exporter can either claim a refund of the accumulated ITC or utilize it for the payment of taxes on domestic supplies.

Export of Services

Export of services under GST is defined as the supply of services to a person located outside India. The exporter needs to follow the following procedure:

  1. The exporter needs to obtain a Service Export Invoice from the buyer.
  2. The exporter needs to file a GST declaration in Form GSTR 3B, which contains the details of the export transaction.
  3. The exporter can either claim a refund of the accumulated ITC or utilize it for the payment of taxes on domestic supplies.

Key Takeaways

  • Exports under GST are treated as zero-rated supplies.
  • The exporter can claim the ITC on the inputs used for the exports.
  • The exporter needs to comply with certain procedural formalities to claim the ITC.
  • The exporter needs to file a Shipping Bill and an Export General Manifest for the export of goods.
  • The exporter needs to file a Service Export Invoice for the export of services.

Conclusion

The GST regime has simplified the taxation system for exports in India. The zero-rating of exports and the availability of ITC on the inputs used for the exports have made exports more competitive. However, it is essential to comply with the procedural formalities to claim the ITC. The exporter needs to file the necessary documents and declarations to claim the ITC or utilize it for the payment of taxes on domestic supplies.

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Updated on:
March 16, 2024