Nifty99000 100%

Sensex99000 100%

Article rating: No rating
Article rating: No rating
Article rating: 5.0
Article rating: 5.0
Article rating: 5.0
Article rating: 5.0
Article rating: 5.0
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: 4.0
Article rating: 5.0
Article rating: 3.3
Article rating: 5.0
RSS

News

No GST refunds for foreigners as of now: Finance Ministry

Author: PTI/Monday, August 6, 2018/Categories: TRACKING THE GST

No GST refunds for foreigners as of now: Finance Ministry

By Ashwini Shrivastava

New Delhi, Aug 6 - Foreigners coming to India may not get GST refunds on goods purchased and carried back by them as the government has not invoked relevant provisions of the Integrated Goods and Services Tax Act yet, the Finance Ministry has said in reply to an RTI query.

It was asked to provide details on procedures for foreigners to get GST refunds on goods purchased by them in India.

Some western nations provide refunds of certain taxes on goods purchased by foreigners there.

“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.

According to 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.

The IGST makes provisions for the levy and collection of taxes on inter-state supply of goods or services or both by the Central government.

According to senior GST professional Sandeep Chilana, the government should come out with terms, conditions and safeguards for refunds of GST paid by international tourists in India

“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,” he said.

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.

Like other developed countries, it is likely that the foreign tourist would need to show the form/certificate along with invoices etc at refund counters that need to be set up at exiting points like international airports, so that tourists can get refunds of the GST paid on the goods brought by them, the tax expert said.

He added that foreign countries, mainly in Europe, have established a provision that a foreigner needs to show a form or receipt that he has got on purchase of particular goods to get refund. 

“I feel having a provision for refund of taxes to foreign tourists will definitely act as a motivation for international travellers. It will encourage them to spend more money in India. It will promote tourism in the country and help in generating foreign exchange from the tourists. It will give huge impetus to demand for various industries including handicraft, textiles etc.,” Chilana said.

The Goods and Services Tax came into force on July 1, 2017.

“But Section 15 of the IGST has not been brought into force yet. It is more than a year since we implemented the GST and the IT system has also stabilised to a great extent. It is high time we bring into effect this provision of refund of GST taxes to foreigners,” he said.

Print Rate this article:
No rating

Number of views (134)/Comments (0)

rajyashree guha

PTI

Other posts by PTI
Contact author

Leave a comment

Name:
Email:
Comment:
Add comment

Name:
Email:
Subject:
Message:
x

Videos

Ask the Finapolis.

I'm not a robot
 
Dharmendra Satpathy
Col. Sanjeev Govila (retd)
Hum Fauji Investments
 
The Finapolis' expert answers your queries on investments, taxation and personal finance. Want advice? Submit your Question above
Want to Invest
 
 

Categories

Disclaimer

The technical studies / analysis discussed here can be at odds with our fundamental views / analysis. The information and views presented in this report are prepared by Karvy Consultants Limited. The information contained herein is based on our analysis and upon sources that we consider reliable. We, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and we are not responsible for any loss incurred based upon it. The investments discussed or recommended in this report may not be suitable for all investors. Investors must make their own investment decisions based on their specific investment objectives and financial position and using such independent advice, as they believe necessary. While acting upon any information or analysis mentioned in this report, investors may please note that neither Karvy nor Karvy Consultants nor any person connected with any associate companies of Karvy accepts any liability arising from the use of this information and views mentioned in this document. The author, directors and other employees of Karvy and its affiliates may hold long or short positions in the above mentioned companies from time to time. Every employee of Karvy and its associate companies is required to disclose his/her individual stock holdings and details of trades, if any, that they undertake. The team rendering corporate analysis and investment recommendations are restricted in purchasing/selling of shares or other securities till such a time this recommendation has either been displayed or has been forwarded to clients of Karvy. All employees are further restricted to place orders only through Karvy Consultants Ltd. This report is intended for a restricted audience and we are not soliciting any action based on it. Neither the information nor any opinion expressed herein constitutes an offer or an invitation to make an offer, to buy or sell any securities, or any options, futures or other derivatives related to such securities.

Subscribe For Free

Get the e-paper free