The Integrated GST Act, enacted five years ago, provides for refund on goods which are to be taken out of the county by a tourist, a person who is not ordinarily a resident of India, and not more than six non-residents in the country. Months for immigration purposes.
Many countries follow a system of GST or VAT refunds for tourists for consumption outside the country as export taxes are not normally performed, a principle that is also followed in duty-free shops at airports. Excise above a threshold in these countries is eligible for a refund of taxes, which can be claimed at the airport and payment received there or often transferred to the buyer’s bank account.
Government sources said with the end of the GST regime, the Center is discussing the possibility of a pilot, which would include outlets like Cottage Industries Emporium and expand it based on experience.
Tax experts said several changes are needed to implement the scheme and it will take time. To begin with, even for a pilot, the rules need to be in place to enforce the provision. The invoicing system will also need to be updated, which an official said sought to be addressed when the pilot is run. This will require a tweak GST Network architecture.
“GST refund to international tourists is in line with global best practices as the product is not being ‘consumed’ in India. It will boost tourism sector and items like handicrafts, textiles etc. The government will have to come up with rules and procedures for this refund, including a system of verification to ensure that the GST has been paid as a B2C transaction. It is not currently reported separately as part of GST filings,” said Prateek Jain, partner at Price Waterhouse & Company consulting firm.
Experts also warned that the system needs to be foolproof to avoid potential misuse. “The machinery provisions to enable foreign tourists to claim refund of GST paid on eligible purchases of goods should be designed very carefully to ensure that there is no misuse of the provisions, while foreign tourists Get an instant refund on their eligible purchases. Too much paperwork,” said ms moneymate Deloitte India,