Do you pay GST when exporting?
Exporting goods and services from India is a popular way for businesses to generate additional revenue. However, there are several taxes that companies need to know about when exporting from India. One of these taxes is the Goods and Service Tax (GST). In this article, we’ll discuss whether or not you pay GST in India when exporting.
Yes, you must pay GST for exports on GST portal if certain conditions are met. If the export of goods or services attracts the GST, then it is not exempt from payment of tax even though the goods are exported outside India.
The payment of GST on exported goods depends upon the following factors:
The Nature Of The Goods & Services Exported
If your profitable business only exports goods that do not come under the category of exemptions then they will be liable to pay GST when exporting. Goods such as motor vehicles, certain petroleum products and jewelry etc., attract a specific rate of tax apart from regular sale transactions and therefore must be paid when exporting them.
The Country To Which The Goods Are Being Exported
Although exports outside of India that use taxable services qualify for an input tax credit, suppliers earn refunds only after submission of evidence to prove payment abroad and details about destination country trade practices for submitted invoices. Therefore, it’s important to understand legal requirements in both origin and destination countries with regard to tax payments on exports before entering into a contract with a supplier abroad.
Export Incentives Provided By the Government Of India
The government provides many incentives for exporters in order to promote export activities within India. Depending upon the nature of exports these can vary significantly ranging from partial refunds on GST paid to full concession or no payment if particular conditions are met export incentive schemes provided by government can provide relief while paying GST while exporting allotted items like specific raw materials & finished product etc mentioned above applicable incentive schemes reduced or exempted rate applies.
In conclusion, exporters/service providers may be required to pay GST on their exports depending upon various factors including but not limited to the nature of goods/services being exported; the country where these goods/services are being exported; export incentives available by GOI etc. It’s important for business owners and entrepreneurs who plan to export their products from India to research Indian laws before beginning those transactions in order to understand what taxes must be paid according to the exchange rates to become eligible for those incentives that may reduce their cost structure significantly.