Goods and Services Tax (GST) is a value-added tax that is applied to most goods and services sold in India. GST is intended to simplify the tax system and make it more efficient by replacing a number of existing taxes with a single, unified tax.
Every registered person delivering goods or services is required to provide a tax invoice under Section 31 of the CGST Act, 2017.
Now, many sorts of invoices may be issued depending on the nature of the supplier, the goods or services provided, the conditions of payment, the type of taxpayer, etc.
As a result, if a taxpayer exports goods, he must produce an export invoice. This is identical to the tax invoice for domestic transactions that was issued. The export invoice does provide some more information, though.
What Does Export Mean Under GST?
As defined by the IGST Act of 2017, exports involve moving goods from India to a foreign country. Similarly, service export refers to the supply of any service when:
- The service provider is based in India.
- The service recipient or purchaser is located outside of India
- The location of service provision is outside of India
- Such a service is paid for by the supplier in convertible foreign currency.
- Both the service provider and the recipient are not just extensions of one specific person.
What is a GST Export Invoice?
An export invoice is simply a bill produced by the exporter for the export of goods and services. Providing goods and services in a foreign currency to a recipient outside of India.
The format and details of the export invoice are identical to those of the standard tax invoice issued under the GST system. However, the GST Export Invoice also includes a few other details.
When it comes to export invoicing, there are a few key things to keep in mind. First, exports are generally GST-free, meaning that no GST is charged on goods or services that are exported from India. This is because exports are considered to be a supply of goods or services that are made outside of India and are therefore not subject to GST.
However, there are some exceptions to this rule. For example, if a company exports goods or services and then imports them back into India, it will be subject to GST. Additionally, if a company exports goods or services and then sells them to a customer outside of India, they will be subject to GST.
To claim a GST refund on exports, exporters must issue a shipping bill and an invoice, which should be certified by the jurisdictional GST officer. The invoice should contain all the details as per GST invoice rules and also the details of the shipping bill.
Additionally, it is important to note that GST is a destination-based tax, which means that the GST paid on goods or services that are exported from India will be credited back to the exporter. This is done through a process called GST refund, which allows exporters to claim back the GST paid on their exports.
Exporters can claim a GST refund by filing an application with the relevant authorities, along with the necessary documentation such as invoices, shipping bills, and other relevant records. The application will then be reviewed and, if approved, the exporter will receive a refund of the GST paid on their exports.
Components of Export Invoice Under GST
- The supplier’s name, address, and GSTIN (exporter in this case)
- Invoice Number – A Serial Number not exceeding 16 characters, in one or multiple series, containing letters or numerals or special characters
- Date of it issue
- Due date
- The recipient’s name, billing address, and shipping address (if it differs from the billing address).
- Whether the export was “Supply Meant for Export on Payment of IGST” or “Supply Meant For Export Under Bond Without Payment of IGST.” The type of exports includes (i) export under Bond or LUT or (ii) export by paying IGST.
- Details of the shipping bill, such as the date, shipping bill number, and shipping port code. Export Invoices can be created without including Shipping Bill details. However, exporters supplying goods or services with payment of IGST would be needing shipping Bill details for claiming a refund of IGST so paid. This is because Shipping Bill that contains GST invoice details furnished by the exporter is taken as the application for claiming a refund of IGST paid on such exports.
- Conversion Rate from Indian Rupee to customer’s selected currency. Such an exchange rate is specified on the Bill of Export issued by Customs authorities.
- The exporter’s physical or digital signature, or the signature of the person acting on his behalf.
- The total value of the invoice, both in terms of Indian Rupee as well as foreign currency. This must be calculated towards the end of the invoice.
In conclusion, GST and export invoicing can be a bit complex, but by understanding the basic principles and following the proper procedures, companies can ensure that they are in compliance with GST laws and take advantage of GST refund opportunities. It is always advisable to seek professional advice to navigate through the GST laws and regulations to avoid any legal complications. Moreover, a GST-compliant accounting and Inventory management software like GenieBooks makes compliance and all-invoice-related operations hassle-free and 100% cloud-based without the risk of any manual errors.