What are the recent amendments in GST concerning exports?

The Goods and Services Tax (GST) in India has seen significant amendments over time, especially concerning the export of goods and services. These amendments aim to streamline processes, ensure compliance, and boost exports by providing certain tax reliefs.

Recent Amendments in GST Concerning Exports:

1. Refund of Input Tax Credit (ITC):
   • Amendment: Exports are treated as zero-rated supplies under the GST law, meaning that the goods or services exported are exempt from GST. However, exporters can claim a refund of the Input Tax Credit (ITC) paid on inputs used in the export process.
   • Provision: As per Section 16(3) of the Integrated Goods and Services Tax Act (IGST), exporters can either export goods or services under Bond/LUT (Letter of Undertaking) without payment of tax, or they can pay the tax and claim a refund.
   • Recent Updates: In 2023, the government made several changes to speed up the ITC refund process for exporters. This includes the establishment of a simplified refund mechanism and introduction of Refund Module under GST Portal, where exporters can directly apply for refunds without relying on intermediaries.
   • Legislation Reference: Section 16(3) of the IGST Act, 2017.
2. GST on Export of Services:
   • Amendment: Export of services is also treated as zero-rated, and exporters can claim a refund of any input taxes paid.
   • Provision: The definition of export of services under Section 2(6) of the IGST Act is key in this context. For a service to qualify as an export, it must be supplied outside India and meet other conditions specified by the law.
   • Recent Development: The government has clarified and streamlined the process of determining whether a service qualifies for export, especially concerning business-to-business (B2B) services.
3. E-Way Bill Exemption for Exports:
   • Amendment: Exports are exempt from the requirement of an E-way Bill under the GST regime, which means that goods being exported do not require the generation of an E-way Bill.
   • Provision: As per Rule 138 of the CGST Rules, goods moving for export are excluded from the requirement of an E-way Bill.
4. Customs Duty on Exported Goods:
   • Amendment: There have been discussions to harmonize GST with customs duties to simplify the export process. This includes the Refund of Customs Duty under section 74 and the Duty Drawback Scheme, which allows for the refund of some or all of the customs duties paid on exported goods.
5. Changes in Export Documentation:
   • Amendment: The government has also been working on digitizing the documentation process, making it easier for exporters to submit their claims for refunds, including exporter-specific GST returns.

Provisions in the Indian Constitution Regarding Exports:

• The Indian Constitution (Article 286) grants the Union Government the exclusive power to impose duties on exports and imports (Customs Duty). However, GST on exports, being a national tax, is controlled under the GST Act, 2017, which harmonizes indirect taxes across the country.
  • Article 286 allows the states to impose tax on goods and services, but exports are outside the purview of such taxes.
  • Under Article 265, no tax can be levied or collected except by the authority of law, and under Article 366, export of goods and services is excluded from the definition of “supply,” which is why exports are zero-rated for GST.

Landmark Cases Related to Exports under GST:

1. In Re: M/s. Jindal Stainless Ltd. (2018):
   • Issue: Whether export of goods under the zero-rated supply provision should be subject to the payment of taxes and if input tax credit on export goods should be refunded.
   • Outcome: The ruling affirmed that export goods are considered zero-rated supplies under the GST regime, allowing exporters to claim a refund for the input tax credit.
2. Ravindra Kumar Verma v. Union of India (2021):
   • Issue: Whether the refund of Input Tax Credit (ITC) for exporters can be denied if procedural delays are involved.
   • Outcome: The court ruled in favor of the exporter, stating that refund claims should be processed in a timely manner, and any delay would be deemed an infringement of the taxpayer’s rights.
3. Vikas Overseas v. Union of India (2021):
   • Issue: Whether export of services can be treated as zero-rated even if services are not physically exported.
   • Outcome: The court ruled that services, even if intangible, qualify as exports if they are consumed outside India and the transaction meets other legal criteria.
4. M/s. Ruchira Papers Ltd. v. Union of India (2020):
   • Issue: The legality of the non-refundable portion of ITC on export transactions and the claims on export-related documents.
   • Outcome: The case resulted in a clarification that exporters are entitled to a refund of ITC in the form of a cash refund or adjustment, subject to proper documentation and compliance with prescribed norms.

Conclusion:

Recent amendments to the GST law concerning exports aim to enhance the ease of doing business, streamline refunds, and make the tax process more transparent and efficient for exporters. The constitutional framework supports these changes, ensuring that exports remain a tax-free activity under the Indian tax system, while offering exporters relief in terms of input tax credits. Landmark cases have further clarified the application of GST provisions for export-related activities, providing a better understanding of the law’s interpretation.