Provisions for GST Refunds to International Tourists

India will introduce a GST refund system for international tourists, enabling them to reclaim taxes on purchases, enhancing their travel experience and savings.

CA Raj Kumar - Avatar Image Written by CA Raj Kumar - Updated on June 26, 2024. Estimated Reading Time: 2 minutes.
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Provisions for GST Refunds to International Tourists

As global travel experiences become more accessible, India is stepping up its efforts to make tourism an even more rewarding experience by soon introducing a tax refund system. This will be in line with the policies in foreign countries that allow tax-free shopping for tourists. This blog post explores the provisions related to refund of GST for international tourists in India.

Understanding GST Refunds:

The Goods and Services Tax (GST) is a tax that applies to almost all goods and services in India. When it comes to international tourists, they are eligible for refunds of the GST paid on their purchases within the country upon departure.

Eligibility for refunds:

To qualify for a GST refund, you must meet certain criteria outlined in Section 15 of India’s IGST Act. Before we begin, let’s clarify what we mean by “tourist” in this context.

A ‘tourist’ is defined as an individual who enters India on a non-immigrant basis and stays for not more than six months with the intention of engaging in legitimate activities.

Section 15 states that “the¬†integrated tax paid by 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.

Note: It states “integrated tax” implying only IGST can be refunded. Section 8(1) clarifies that when suppliers in India sell goods to tourists who are leaving the country, these transactions are not treated as intra-state supplies. This implies that to qualify for refunds, suppliers must identify these tourists and charge only IGST and not CGST and SGST components.

Expected Inclusions and Exclusions in the Scheme
This refund scheme shall benefit several categories of visitors to the country, including crew members of international conveyances, foreign diplomats on official duties, foreign athletes participating in tournaments or training, foreign journalists, camera crews, artists visiting for professional reasons, etc.

Although the government has not yet specified the procedures and eligibility for refunds for tourists, it is expected that these refund schemes will also have some exclusions. These exclusions are expected to apply to residents of India, diplomats on overseas deputations, etc. The government aims to streamline the GST refund process for visitors to the country to enhance their experience in India.

Streamlining the refund process:

The Indian government is currently developing a process for foreign tourists to get GST refunds on their purchases of goods and services in the country. The government’s focus is on creating an efficient and user-friendly process for tourists claiming GST refunds. This includes implementing online systems for easier claim submission, reducing paperwork, and enhancing transparency. By utilizing these channels, tourists will be able to claim their refunds seamlessly and effortlessly, making the most of their Indian experience.

Conclusion:

The introduction of the GST refund system for international tourists is going to be another step by the Indian government to enhance the travel experience and boost the country’s tourism industry. This policy will not only encourage more visitors but also help them save money, making India an even more appealing destination.


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CA Raj Kumar Post Author Avatar
CA Raj Kumar

I love blogging and studying taxation. I write articles related to Tax laws and common issues in handling taxation in India. Often, common but small mistakes make things complicated. I write and share them to save precious time of others.


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