GST Refund for Tourists Visiting India

Many countries such as Canada, Australia, New Zealand and others implemented GST and offers GST refund for tourists visiting their country. Similarly, in India, the GST Act provides options to avail GST refund for foreign tourists visiting India. The refund applies for the GST goods purchased in India as Goods and Services Tax (GST) functions as an indirect tax levied on the consumption of goods and services supplied in India. In this article, we look at GST refund for Tourists as well as the procedure for claiming a refund as a Tourist.

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GST Refund for Tourists (Rule)

Section 15 of the Integrated Goods and Service Tax (IGST) Act deals with a refund of integrated tax paid on supply of goods to tourist leaving India. According to Section 15 of the IGST Act: Refund applies to the integrated tax paid by foreign tourist leaving India on any supply of goods taken out of India. The refund of the integrated tax applies to the purchase made by the foreign tourist leaving India as per the conditions prescribed in the IGST Act.

Explanation: For the purposes of this section, the term “tourist” refers to a person not normally resident in India, who enters India for a stay of not more than six months for legitimate non-immigrant purposes.

Hence, tourists visiting India who enter and stay for not more than six months on legitimate non-immigrant purposes are eligible to claim a refund of IGST paid on supply of goods taken out of India. It is important to note that GST refund for tourists will not be allowed on goods or services that they consumed while in India. The refund applies only on the supply of goods taken out of India by the tourist; hence the product remains unconsumed in India. Learn more: How to get GST refund?

Process for Claiming GST Refund

The GST Refund Rules are yet to provide a methodology for Foreign Tourists visiting India to claim GST refund. The following pdf refers to the present GST Refund Rules in India:

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Though the procedure for tourists to claim GST refund remains tenuous, the Ministry of Finance shall streamline the GST law to create a standardised procedure for processing a GST refund claim across India. On filing a GST refund application, an acknowledgement for refund application would be provided within 14 days of the refund application is acceptable. Also, on receiving a GST refund request, the concerned Officer would have to convey the status of the application within 14 days. If there are any deficiencies in the application, the GST refund request would be sent back to the applicant along with the list of deficiencies and the applicant can refile the application. If there are no errors or deficiencies, the GST refund claims, if in the order must be sanctioned within a period of 60 days from the date of receipt of the claim. Officers shall not issue deficiencies memo after 14 days during the process of the refund application process. Hence, foreign tourists can expect a quick and standard process for refund processing.

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