Export Procedures under GST Law in India: A Comprehensive Guide
Exporting goods and services has always been a significant part of India’s economy. With the implementation of the Goods and Services Tax (GST) regime, the export procedure has undergone substantial changes. In this blog, we will delve into the export procedures under GST law in India, including the applicability of GST on exports, to help you navigate the complexities of international trade.
Understanding GST and Its Applicability to Exports
Before delving into the export procedure, it’s essential to understand how GST applies to exports:
Applicability of GST on Exports:
- Zero-Rated Supply: Under GST law, exports are considered “zero-rated supplies.” This means that the GST rate on exports is 0%, ensuring that exporters do not bear any GST liability on the goods or services they export.
- Input Tax Credit (ITC): Exporters can claim a refund of the GST paid on inputs, input services, and capital goods used to manufacture goods or provide services meant for export. This ensures that the entire GST burden is neutralized.
Export Procedure under GST Law in India
The export procedure under GST involves several key steps:
1. Obtain GST Registration:
- To engage in export activities, you need to have a GST registration. You can apply for GST registration online through the GST portal.
2. Declare Your Export Intent:
- When you export goods, declare your intent to export by mentioning “Export” in the place of supply while generating an invoice or an export invoice. Ensure that the invoice contains all the necessary details as required by GST law.
3. Pay IGST (Integrated GST):
- In the case of goods, you need to pay IGST on the invoice value. The IGST paid can later be claimed as a refund.
4. File Shipping Bill and Bill of Export:
- For physical export of goods, you need to file a shipping bill with the customs authorities. For export of services, you must file a Bill of Export.
5. Generate E-way Bill (if applicable):
- If the consignment value of goods exceeds Rs. 50,000, generate an E-way bill for the transportation of goods.
6. Submit GST Returns:
- File your monthly, quarterly, and annual GST returns as applicable, including GSTR-1, GSTR-3B, and GSTR-9, to declare your export details and claim refunds.
7. Claim Refund:
- After filing your returns, claim a refund of the IGST paid on exports, as well as any unutilized ITC.
8. Document Verification:
- The customs authorities may verify your export documents and inspect the goods before granting export clearance.
9. Export Promotion Schemes (Optional):
- You may consider utilizing export promotion schemes like Advance Authorization, EPCG (Export Promotion Capital Goods), or MEIS (Merchandise Exports from India Scheme) to further boost your export activities.
Export Incentives and Benefits
Exporters in India can enjoy several incentives and benefits, including:
- GST Refunds: As mentioned earlier, exporters can claim a refund of the IGST paid on exports and unutilized ITC, ensuring that they are not burdened with any GST liability.
- Duty Drawback: Under the Duty Drawback Scheme, exporters can claim a refund of customs and excise duties paid on inputs used for manufacturing exported goods.
- Export Promotion Schemes: Various export promotion schemes encourage and support exporters, providing them with financial incentives, exemptions, and reduced customs duties.
Conclusion
Navigating the export procedures under GST law in India requires a good understanding of the GST regime, compliance with documentation and filing requirements, and utilization of export incentives and benefits. It’s essential for exporters to stay updated on any changes or amendments to GST rules and regulations to ensure smooth and hassle-free export operations. By following the prescribed export procedures and leveraging available benefits, Indian exporters can continue to thrive in the global market.