Goods
and Services Tax (GST) is a unified indirect tax system implemented in India to
simplify and streamline the country's taxation structure. It has had a
significant impact on exporters by providing a transparent and integrated tax
framework. In this article, we will delve into the key aspects of GST
compliance for exporters in India, including registration, documentation,
invoicing, and refund procedures.
GST
Registration for Exporters
Exporters in India are required to
obtain a GST registration. They can opt for either a regular
GST registration
or the Goods and Services Taxpayer Identification Number (GSTIN) under the
Export Promotion Capital Goods (EPCG) scheme. The registration process involves
providing necessary business details, such as PAN, address proof, bank account
details, and supporting documents.
Export
Documentation
Exporters must comply with specific
documentation requirements to establish the legitimacy of their exports. The
key documents include:
a.
Export Invoice: An export invoice is issued for each consignment of goods or
services exported. It must contain essential details such as the exporter's and
recipient's information, invoice number, date, description, quantity, value,
and the applicable GST rate.
b.
Shipping Bill: A shipping bill is a crucial document that serves as proof of
export. It includes details about the goods, the exporter, the consignee, and
the destination country. This document is generated electronically through the
Indian Customs Electronic Data Interchange System (ICES) or manually at the
customs office.
c.
Bill of Lading/Airway Bill: These documents act as receipts issued by shipping
carriers and airlines, respectively, and confirm the acceptance and
transportation of goods. They also contain information about the exporter,
consignee, goods, and their destination.
Zero-Rated
Supply and IGST Refunds
Exports are treated as zero-rated
supplies under GST, meaning that no GST is levied on the exported goods or
services. However, exporters can claim a refund of the Integrated Goods and
Services Tax (IGST) paid on inputs or input services used in the manufacturing
or provision of exported goods or services.
To
claim an IGST refund, exporters need to file a refund application
electronically through the GST portal. The application must be supported by
relevant documents, such as invoices, shipping bills, and bank realizations
certificates (BRCs).
Letter
of Undertaking (LUT)
Under the GST regime, exporters have
the option to furnish a
Letter of Undertaking (LUT) instead of providing a bond
to avail themselves of zero-rated supplies without paying IGST. The LUT is a
declaration by the exporter stating that they will fulfill all export-related
obligations and abide by GST rules. It eliminates the need for exporters to
block their working capital in the form of a bond.
GST compliance for exporters in
India is a crucial aspect of conducting international trade. By understanding
the registration process, adhering to documentation requirements, and
effectively claiming IGST refunds, exporters can ensure smooth operations and
take advantage of the benefits offered by the GST regime. It is advisable for
exporters to consult with tax professionals or seek guidance from the official
GST portal for specific and up-to-date compliance procedures.
Created
& Posted by
Pooja
Income
Tax Expert at TAXAJ
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