Under the Goods and Services Tax (GST) regime in India, the treatment of exports and imports is designed to facilitate international trade while ensuring the proper collection of tax. The specific provisions for exports and imports are as follows: 1. GST Treatment for Exports: Zero-Rated Supply: Exports are treated as a zero-rated supply under GST. This means that the supply of goods and services to international markets is not subject to any GST, making exports effectively tax-free. Input Tax Credit (ITC): Though exports are zero-rated, exporters are still allowed to claim the Input Tax Credit (ITC) on inputs, capital goods, and input services used to make the exported goods or services. The ITC can be refunded if it is not adjusted against output tax liability. Refund of Unutilized ITC: Since exports are zero-rated, businesses can claim a refund for any unutilized ITC. This is generally done through the GST Refund Process. The refund can be claimed for: Goods exported outside India. Services exported (as defined by the GST Act). Export Declaration: Exporters must comply with the documentation requirements under GST, including filing GST returns and maintaining export invoices, as well as fulfilling customs formalities. Shipping Bill: In the case of export of goods, a shipping bill must be filed, and the export documents must be verified by customs for clearance. 2. GST Treatment for Imports: Import of Goods: The import of goods into India is treated as an inter-state supply under GST. GST is levied on imported goods at the customs point as part of Customs Duty and IGST (Integrated Goods and Services Tax). IGST on Imports: When goods are imported into India, the IGST is payable on the total value of the goods, including customs duties. Customs Duty and IGST: The customs duties (Basic Customs Duty, Countervailing Duty, etc.) are levied under the Customs Act, and IGST is applied in addition to these duties. Payment of IGST: IGST on imported goods is payable at the time of import and is typically paid by the importer to the Customs Department. Input Tax Credit for Imports: The IGST paid on imports can be claimed as Input Tax Credit (ITC) by the importer (whether they are a registered taxpayer or not), provided the goods are used for business purposes. This helps in reducing the tax burden on the importer, as the ITC can be set off against any output tax liability. Import of Services: The import of services is also subject to IGST. The recipient of the imported service must pay IGST, and the tax paid can be claimed as ITC by the recipient, subject to the conditions under the GST Act. Customs Documentation: For imports, proper customs clearance is required, including the filing of Bill of Entry for goods imported, and IGST is paid to the Customs Department at the point of entry into India. 3. Refunds on Exports: Exporters can claim a refund of IGST paid on the export of goods and services. The process for claiming the refund is generally as follows: The exporter must file the GST returns and declare exports made during the period. Refund applications are submitted to the GST authorities. The refund is typically processed and paid to the exporter, subject to verification. 4. Special Provisions for Exporters: Exporters' Scheme: There are specific schemes designed to help exporters, such as the Export Promotion Capital Goods (EPCG) scheme and Advance Authorization scheme, which provide benefits like exemptions or concessional rates on taxes and duties for goods used in exports. Summary of GST Treatment for Exports and Imports Exports: Zero-rated supply (no GST on exports). Refund of unutilized ITC for exported goods and services. Documentation and filing of returns are required. Imports: IGST is levied on the value of goods and services imported into India. Input Tax Credit (ITC) can be claimed on IGST paid for imported goods and services. Customs documentation (shipping bill, Bill of Entry) and payment of IGST at the customs point. This treatment ensures that exports are not burdened with GST while facilitating the recovery of taxes on imports, promoting a seamless flow of goods and services in and out of India.

DEAR CLIENT, Goods and Services Tax (GST) in India follows a structured approach for the taxation of exports and imports. Under the IGST Act, 2017, exports are generally zero-rated, while imports attract Integrated GST (IGST) along with applicable Customs Duty. Below is a detailed explanation of the GST treatment for exports and imports in India. GST on Exports Under Section 16 of the IGST Act, 2017, exports of goods and services are treated as zero-rated supplies. This means exporters can claim a refund of the GST paid on inputs and input services used to manufacture export goods. There are two options available for exporters: A. Export with Payment of IGST (Refund Route) • The exporter pays IGST on exports and later claims a refund. • The refund is processed based on shipping bill details and GST returns (GSTR-1 & GSTR-3B). • Refund is typically granted within 30 to 60 days from the date of filing. B. Export without Payment of IGST (LUT/Bond Route) • Exporters can export without paying IGST by filing a Letter of Undertaking (LUT) or a Bond with the GST department. • No GST is required to be paid at the time of export. • The exporter can claim a refund of unutilized Input Tax Credit (ITC). Documents Required for GST Refund on Exports • Shipping bill • Export invoice • Bank realization certificate (BRC) • GSTR-1 and GSTR-3B filings GST on Imports Imports in India are subject to IGST and Customs Duties, as per the Customs Act, 1962. When goods or services are imported, the importer is required to pay IGST under the reverse charge mechanism (RCM). A. IGST on Import of Goods • IGST is levied under Section 3(7) of the Customs Tariff Act, 1975. • The applicable IGST rate depends on the HSN code of the product. • IGST is calculated as: IGST = (Assessable Value + Customs Duty) × Applicable IGST Rate • The importer can claim ITC on IGST paid, provided the goods are used for taxable supplies. B. IGST on Import of Services • The recipient of the service in India must pay GST under the Reverse Charge Mechanism (RCM). • Import of services is taxable if: o The supplier is located outside India. o The recipient is in India. o The service is consumed in India. • The recipient can claim ITC on IGST paid, subject to compliance with GST laws. Documents Required for IGST on Imports • Bill of Entry • Import invoice • Shipping documents • GST return filings (GSTR-2A & GSTR-3B) Special Provisions for SEZ Units • Supplies to SEZ units are considered zero-rated, similar to exports. • SEZ units can receive goods without payment of GST under LUT/Bond. • Any supply from SEZ to Domestic Tariff Area (DTA) is treated as an import and subject to IGST. GST Compliance for Exporters and Importers • File GST returns (GSTR-1, GSTR-3B, GSTR-2A). • Maintain accurate records of invoices, shipping bills, and payments. • Claim ITC timely to reduce tax burden. WE HOPE THIS CLARIFIES YOUR QUERY. PLEASE FEEL FREE TO REACH OUT FOR FURTHER ASSISTANCE. THANK YOU.

DEAR CLIENT, Goods and Services Tax (GST) is a comprehensive indirect tax system implemented in India on July 1, 2017. It is essential for businesses engaged in international trade to understand the GST treatment for exports and imports. Below is an overview of the GST implications for both exports and imports in the Indian legal context. Zero-Rated Supply: Exports are classified as zero-rated supplies under GST. This means that the supply of goods and services exported out of India is subject to a tax rate of 0%. Consequently, exporters do not charge GST on export transactions, which can enhance their competitiveness in international markets. Input Tax Credit (ITC): Since exports are zero-rated, businesses can claim a refund of the input tax credit (ITC) on inputs and input services used in the production of exported goods or services. This is crucial for exporters as it allows them to recover the GST paid on raw materials, thus avoiding any tax burden. Refund Process: Exporters can apply for a refund of the accumulated ITC. This process typically involves: • Filing GST Returns: Exporters need to file the required GSTR-1 and GSTR-3B forms. The details of exports must be reflected accurately. • Applying for Refund: A formal application for refund of input tax credits can be made in Form GST RFD-01. • Time Frame: Refund claims should generally be filed within two years from the relevant date. Documentation: For the refund process, exporters must maintain proper documentation such as: • Shipping bills. • GST invoices. • Bank realization certificates confirming the receipt of payment in foreign currency. Levy of GST: Imports into India are subject to the Integrated Goods and Services Tax (IGST). The IGST rate is typically equivalent to the applicable GST rate for the goods or services. The import of goods is treated as supply and attracts both customs duties and IGST. Input Tax Credit for Imports: Importers can claim the ITC for the IGST paid on importation, which allows them to recover the tax paid on imported goods/services. This credit can be utilized while discharging output tax liability on domestic supplies. Customs Duty: While importing goods, customs duties are applicable. The payable IGST is calculated on the value of the goods, including any customs duties. Therefore, the total tax burden upon import includes both customs duty and IGST. Filing Requirements: Importers must comply with certain filing requirements, including: • Filing the Bill of Entry, which is required for clearing goods at customs. • Providing proper documentation to avail of ITC on IGST paid. GST Compliance: Exporters and importers must diligently comply with GST regulations, including timely filing of returns and payment of any applicable taxes. Non-compliance can lead to penalties and interest charges. Record Keeping: Both exporters and importers should maintain extensive records, including: • Copies of shipping bills or Bill of Entry. • Tax invoices for all transactions. • Bank statements evidencing receipt of payment or payment made for imports. WE HOPE THIS CLARIFIES YOUR QUERY. PLEASE FEEL FREE TO REACH OUT FOR FURTHER ASSISTANCE. THANK YOU.