Export of Services Under GST: What Do You Know

 

If you’re in the business of providing goods or services, you’ll probably want to read this article on exporting services under GST to understand how it applies to your business and what taxes apply when you sell goods or services outside of India.

How Will the GST on Exports Be Levied? The supply of products and services that are exported is not taxed. No GST will be assessed on the export of any products or services. The tax paid on inputs for the export of exempt items was eligible for a duty drawback under the prior laws.
 
What Is the GST All About?

It is a destination-based tax, which means that it is levied on the consumption of goods and services in the country. The GST was introduced on July 1, 2017, and subsumed a number of indirect taxes, including the value-added tax (VAT), central excise duty, service tax, octroi, and entry tax. The GST is levied at different rates for different goods and services.

How is the GST Law applied to exports?

Exports of goods or services have been handled as follows under the GST Law: interstate supply, which is protected by the IGST Act.  Exports of products or services that qualify as “zero-rated supplies” are exempt from GST assessed on them at either the input stage or the final product stage.
 
How is the export of services taxed?

The export of services is taxed at 18% under GST. GST registration is required for the export of services. The conditions for the export of services under GST are that the service should be provided from India to a foreign country and the service provider should have a valid GST registration.
 
Documents required for the export of services under GST
 
If you’re planning on exporting services from India, there are a few things you need to know in order to be compliant with the Goods and Services Tax (GST). First, you’ll need to register for GST. Once you’re registered, you’ll need to file a monthly return. In addition, you’ll need to keep invoices and other documentation handy in case the authorities request them. The documents required for the export of services under GST are a bill of supply, an invoice, and a packing list.

Is GST applicable on the export of services?

GST is applicable on the export of services from India. The export of goods or services has been treated as an inter-state supply and is covered under the IGST Act. Exports of products or services are exempt from GST assessed on them either at the input stage or the end product stage (also known as a zero-rated supply).. While, services exported from India are exempted from GST on payment of IGST on the import of services which is remitted to the Central Government.

Conditions for export of services under GST

You would need to register for GST since exports are inter-state supplies. You would get the items from the manufacturer after paying the appropriate IGST, CGST, SGST, or UTGST. 
Everything you need to know about GST-compliant service exportation: The big news is that GST will be levied on the export of services from India with effect from the 1st of July, 2017.

The average rate notified by the RBI for the preceding quarter shall be used for the export of GST-registered services, as specified in section 14(i)(d) read with sub-rule (4) of Rule 18 of the IGST Rules, 2017.

Exemptions from Registration in the Case of Export of Services (Resident)

Under the GST regime, all businesses need to be registered if their turnover exceeds the threshold limit. However, there are certain categories of businesses that are exempt from registration. One such category is businesses that deal with the export of services. If you are a resident and your business deals solely with the export of services, then you are not required to register for GST.