Government of India provides various benefits and reliefs in case of exports from time to time, to promote the foreign trade in India which helps to boost the economic growth and create a place in the international market. Tax incidence is case of Exports of Goods and/or Services is always NIL.
Export of Goods (Section 2(5) of IGST Act, 2017): "export of goods” with its grammatical variations and cognate expressions, means taking goods out of India to a place outside India.
Export of Services (Section 2(6) of IGST Act, 2017): "export of services” means the supply of any service when,–
While exporting the Goods outside India, the exporter furnishes a SHIPPING BILL. To claim the refund, no separate application is required to be filed. The Shipping Bill shall be deemed to be an application for the refund of the integrated tax paid on goods exported out of India. However, following conditions are required to be met along with the filling of the Shipping Bill:
Refund of Export of Services can be claimed by filling Form GST RFD-01 with the department electronically.
In case the Goods are exported to Bhutan, the Central Government MAY pay refund of the tax to the Government of Bhutan for such class of goods as may be notified in this behalf and where such refund is paid to the Government of Bhutan, the exporter shall not be paid any refund of such tax.
Letter of Undertaking is a bond or like a guarantee under which the registered person can export the goods out of India without payment of tax and interest thereon as applicable.
Any registered person exporting the goods out of India can use furnish LUTs except for those who have been prosecuted for tax evasion for an amount of Rs. 2.5 Crore or above under the Act.
LUT is valid for a period of 1 year. (end of the financial year). Fresh LUT is required to be submitted for each Financial Year.
Letter of Undertaking or Bond is furnished for binding the registered person to pay the Tax and interest thereon in case following circumstances occurs:
LUT shall stand withdrawn and the same will be restored when the Tax along with interest shall be paid by the registered person within 15 day from the end of the 3 months / One Year period as the case may be.