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GST ON EXPORTS

19 March 2020

In gst exports can be taxed in two ways. With and without payment of tax.
Gst is destination based consumption tax,consumer state gets the gst revenue.
When goods are exported , the country to which they are exported should get the revenue.
Hence, exporting country can't tax EXPORTS and they are 0 rated.
So, when we aren't paying any tax while exporting.How is the second option ( with payment of tax) valid?

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6 Replies

CA Naveen Chand (Chartered Accountant) (12729 Points)
Replied 19 March 2020

with payment of tax is like (pay the taxes at the time of export , if not having LUT and take it back as refund)

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Harshit Acharya (404 Points)
Replied 19 March 2020

But what taxes are to be paid??We are exporting that means we are providing service of export. The person to whom we are exporting will pay us the amount( inclusive of taxes) .The tax which will be paid by him will be the revenue of his country. As GST is destination based consumption tax. So in this whole scheme ,where are we paying tax..I think ,I lack complete knowledge in this concept. Please clear this.

M Dinesh [Accountant] (Senior accountant ) (55 Points)
Replied 20 March 2020

Central government has an aim of increasing the output and the quality of exports from India as portrayed by the “Make in India” policy, and the many tax benefits provided to the exporters. since, exporting from india will increase the value of indian money GST will not be levied here.

comes to your query we are paying only customs duty if your product covered under Second Schedule of Custom Duty Tariff Act , 1975. apart from that no other taxes like GST will not be paid here, if we are not having LUT bond means we have to pay IGST during transaction and then we can applied for refund under section 54 of CGST Act, here shipping bill is considered as a deemed application to get a refund of IGST paid.

Harshit Acharya (404 Points)
Replied 20 March 2020

Is this IGST under Gst act or customs act

M Dinesh [Accountant] (Senior accountant ) (55 Points)
Replied 20 March 2020

don,t get confused, i mentioned IGST, because it was an export [to other country] thats it.

so only customs duty will be applicable during export if your product covered under schedule II of customs duty tariff act.

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Harshit Acharya (404 Points)
Replied 20 March 2020

You said if we are not having LUT bond means we have to pay IGST ..Here "WE " have to pay, made me think like we are paying...Now it's clear...Thank you.