Exporting Goods and Services under India GST

In India, the export of goods and services is considered as a zero-rated supply. This means that GST will not be imposed on export of any kind of goods or services.

The following are considered as a zero-rated supply under India GST:

Export of goods or services, or both.
Supply of goods or services, or both to SEZ (Special Economic Zones).

An exporter dealing in zero-rated goods under India GST can claim a refund as per the following options:

Export of goods or services, or both, without payment of IGST under LUT (Letter of Undertaking) or Bond. Subject to such conditions, an exporter can claim refund of the unused input tax credit.
Export of goods or services, or both, on payment of IGST without any requirement of LUT or Bond. Subject to such conditions, an exporter can claim refund of the tax paid on goods or services, or both.

The India Localization SuiteTax Engine SuiteApp enables you to assign an export type to a sales transaction that contains goods, services, or both for export. The SuiteApp calculates GST based on the export type.

If you choose to export goods or services under LUT or Bond, you can create and assign LUT or Bond Detail records to your export transactions.

On sales transactions, if you set Export Type to With LUT or Bond, IGST is not calculated. However, for tax exemption, the invoice must be approved. If the invoice is not approved, tax is calculated irrespective of applying LUT or Bond.

On the Tax Details subtab, the Tax Amount column displays zero, and the Details column displays Without payment of tax amount (amount).

Note:

The transaction’s total IGST amount must be within the LUT bond remaining value. Otherwise, you will not be able to save the record.

Following is an example of tax details without payment of IGST.

An example of tax details for export without payment of Integrated Goods and Services Tax.

If you choose to export without LUT or Bond, you can enable the SuiteApp to automatically generate a journal entry along with the transaction. The journal entry for export is created to support the reverse charge for the tax you paid for the exported goods or services.

On sales transactions, if you set Export Type to Without LUT or Bond, IGST is calculated. The SuiteApp calculates IGST and also creates a journal entry for the transaction.

If the Auto-Generate Adjustment Journal for Export feature is enabled, the SuiteApp automatically creates an adjustment journal after a transaction is created. To enable this feature, see Automated Generation of Journal Entries for Export.

Following is an example of tax details with payment of IGST.

An example of tax details for export on payment of Integrated Goods and Services Tax

To know more information about how to set up the India Localization SuiteTax Engine SuiteApp to handle export of goods or services under India GST, read the following topics:

For information about exporting goods or services under LUT or Bond, see Setting Up the LUT or Bond Details.
For information about exporting goods or services with payment of tax and without LUT or Bond, see Automated Generation of Journal Entries for Export.
For information about assigning your preferred export option for your sales transactions, see Applying India GST on Sales Transactions.

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