Third Country Exports under GST – All You Need to Know

GST or the Goods and Services Tax is a destination-based tax system that has been implemented in India since July 2017. One of the significant benefits of GST is that it has simplified the taxation system and has made it easier for businesses to comply with tax regulations. However, the GST rules and regulations can be a bit complicated, especially when it comes to third country exports. In this article, we will discuss all the things you need to know about third country exports under GST. What is Third Country Export?

Before we dive into the details of the GST rules and regulations for third country exports, let's get a clear understanding of what third country export means. Third country export is the export of goods from India to a country that is not the destination country. For instance, if a business in India exports goods to the USA via Dubai, it is considered a third country export because Dubai is not the destination country.

GST Rules and Regulations for Third Country Exports.

Here are some essential GST rules and regulations that businesses need to follow for third country exports:

1. IGST Applicable:

The Integrated Goods and Services Tax (IGST) is applicable on third country exports.

2. Export without Payment of IGST:

Businesses can export goods without payment of IGST if they follow the LUT/Bond process. Under this process, businesses need to submit a Letter of Undertaking (LUT) or a Bond to the GST department. The LUT/Bond ensures that the business will comply with all the GST rules and regulations and will not claim any refund for the exported goods.

3. Export with Payment of IGST:

If a business does not want to follow the LUT/Bond process, it can export goods with the payment of IGST. The business can claim a refund of the IGST paid on the exported goods.

4. Place of Supply:

In the case of third country exports, the place of supply is the location of the recipient of the goods. For instance, if a business in India exports goods to the USA via Dubai, the place of supply is the USA.

5. Invoice Requirements:

The invoice for third country exports should contain the following details:- Name and address of the recipient- Name and address of the exporter- Description of the goods- Quantity of the goods- Value of the goods- Country of origin of the goods- Port of shipment- Port of destination- GSTIN of the exporter- GSTIN of the recipient

6. Refund of IGST:

The business can claim a refund of the IGST paid on the exported goods by filing a refund application within two years from the date of export.

Conclusion

GST has simplified the taxation system in India, but it can be a bit complicated, especially for businesses that export goods to third countries. In this article, we have discussed all the essential GST rules and regulations for third-country exports. By following these rules and regulations, businesses can ensure compliance with the tax laws and avoid penalties.