GST applicability on Exports


As we all know, GST, one of the major reform in India, was made applicable from July 1st . Since its implementation there are many unexplored topics by the professionals which requires concern for special category of businessman. One of them is GST on export. It is one of the major categories in which, claim for refund may arise. All export made whether on account of supplies of goods or services, have been categorised as “Zero Rated Supplies” in the IGST Act.


As per section 2(5) of IGST Act,

  1. Export of goods means taking goods out of India to a place outside India.
  2. Export of Service means-

a) the supplier of service is located in India

b) the recipient of service is located outside India

c) the place of supply of service is outside India

d) the payment for such service has been received by the supplier of service in convertible foreign exchange and

GST Applicability- Zero Rated Supply

  1. Section 16(1) of IGST Act prescribed that export of goods or services would be treated as “zero rated supply“.
  2. Credit of Input Tax can be availed for making Zero- rated supplies.

Ways of suppling Goods or Services under “Zero rated supply”

As per section 16(3), a registered person making “Zero rated supply” shall be eligible to claim refund under either of the following options-

  1. he may supply goods or services or both under bond or Letter of Undertaking, without payment of integrated tax and claim refund of unutilised input tax credit.
  2. he may supply goods or services or both, on payment of integrated tax and claim refund of such tax paid on goods or services or both supplied.

When to file application for Refund

Rule 96 of CGST Act says that the application for refund of IGST paid on goods exported out of India shall be deemed to have filled only when-

  1. the person in charge of the conveyance carrying the export goods duly files an export manifest or an export report covering the number and the date of shipping bills or bills of export and
  2. the applicant has furnished a valid return in FORM GSTR-3or FORM GSTR-3B, as the case may be;


After gone through this, we can conclude that there is two option of supplying goods outside India, first one is supplying goods and services after payment of IGST and claim refund later on and other one is supplying under LUT without payment of IGST.

Disclaimer – The above summary is based on the personal interpretation of the revised regulations, which may differ person to person. Hence, the readers are expected to take expert opinion before placing reliance on this article.

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