In general, exports of services from India are treated as "zero-rated supplies" under the GST law, provided the prescribed legal conditions are satisfied. This means GST may not ultimately be payable on such exports, although specific compliance requirements must be followed.
Key points:
- Zero-rated supply: Exports of services are generally treated as zero-rated under the GST regime if they meet the conditions prescribed by law.
- Conditions for export of services: To qualify as an export of services, factors such as the location of the supplier and recipient, the place of supply, receipt of payment in convertible foreign exchange (or as otherwise permitted), and the supplier and recipient not being merely establishments of the same person must generally be satisfied.
- Claiming benefits: Eligible exporters may export services without payment of Integrated GST (IGST) by following the prescribed procedure and later claim a refund of eligible input tax credit. Alternatively, where permitted, they may pay IGST on the export and claim a refund of the tax paid.
- Input Tax Credit (ITC): Businesses engaged in exporting services may be eligible to claim refunds of accumulated eligible ITC, subject to compliance with the GST provisions.
- Documentation and compliance: Exporters should maintain proper invoices, contracts, payment records, and other prescribed documents, and file GST returns accurately to claim the available benefits.
- Special situations: If the transaction does not satisfy the legal conditions for an export of services, it may not qualify as a zero-rated supply and could have different GST implications.
