No GST refunds for foreigners presently, says Finance Ministry
No GST refunds for foreigners presently, says Finance Ministry
As the government has not invoked relevant provisions of the Integrated Goods and Services Tax Act yet, foreigners coming to India are not likely to get GST refunds on goods purchased and carried back by them, the Finance Ministry confirmed.
“Please note that Section 15 of the IGST (Integrated Goods and Services Tax) has not yet been enforced. Therefore, the reply of this office…is nil information currently,” the Central Board of Indirect Taxes and Customs (CBIC) said in reply to the Right to Information (RTI) application filed by this PTI correspondent.
As per the section, integrated tax paid by a tourist leaving India on any supply of goods taken out of India by him shall be “refunded in such manner and subject to such conditions and safeguards as may be prescribed”.
“For the purposes of this section, the term ‘tourist’ means a person not normally resident in India, who enters India for a stay of not more than six months for legitimate non-immigrant purposes,” the Act says.
Meanwhile, according to senior GST professional Sandeep Chilana, “GST is a consumption-based tax. To the extent consumption is happening in India the taxes should stay in India. In case the goods are purchased in India and taken by the tourist outside India, it should be seen as export and necessary refund should be available.”
In order to ensure there is no misuse, the mechanism for such a refund process would need to be robust, said Chilana, a partner of the law firm Shardul Amarchand Mangaldas.
“While selling these goods to international tourists, shopkeepers will have to charge IGST only and not local taxes. The government may also require shopkeepers to issue some form/certificate verifying the details of the purchases along with passport number and other relevant details,” he said.
-PTC News
