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Export Procedures and Documents under GST
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Get Started ->Navigating the export landscape under GST can feel overwhelming, but having a clear understanding of the necessary procedures and documents can simplify the process.
When exporting goods or services, proper documentation ensures smooth customs clearance, compliance, and the ability to claim benefits like zero-rated supplies or tax refunds. With the right steps in place, you can reduce your tax liability, streamline your logistics, and avoid costly delays.
Let’s dive into the essential procedures and documents you’ll need to master to export under GST.
Export Documentation Under GST
If you’re running a business and dealing with exports, understanding the required documentation under GST can save you from legal hassles and streamline your process.
By getting the right documents in place, you not only ensure compliance but also unlock multiple benefits like tax refunds and reduced duties. Let’s dive into how you can optimise your export process under GST.
Essential Documents for Exporting Goods Under GST
- Import Export Code (IEC)
To start exporting, you need to obtain an Import Export Code (IEC) from the Director General of Foreign Trade (DGFT). This is a mandatory code, serving as your unique business identifier for cross-border transactions. Without an IEC, you can’t legally export goods or services from India.
- Letter of Undertaking (LUT) or Bond
Exporters can avoid paying Integrated Goods and Services Tax (IGST) upfront by submitting an LUT or Bond. The LUT is typically used when you’re exporting without paying IGST and needs to be renewed every financial year.
If you choose not to use an LUT, you will have to pay IGST and then claim a refund. Submitting this document eliminates cash flow issues and makes your operations smoother.
- GST-Compliant Export Invoice
Your export invoices need to be fully compliant with GST rules. This means your invoice must include:
- The name and address of the recipient (with the destination country mentioned)
- Invoice number and date
- Harmonized System of Nomenclature (HSN) code of goods or services
- Total value with a breakdown of unit prices and applicable taxes (even if zero-rated)
- Shipping Bill
Filed with customs, the shipping bill is essential for clearing your goods and claiming GST refunds. It should contain the goods' description, their value, and the destination. If you’re exporting without paying IGST, ensure that the shipping bill mentions the LUT or Bond details.
- Bank Realization Certificate (BRC) or Foreign Inward Remittance Certificate (FIRC)
These documents serve as proof that you’ve received payment in foreign currency. This is critical because GST compliance demands that you export against payment in convertible foreign currency to claim zero-rated status.
Also Read: 10 Required Pre-Shipment Documents for Export Procedure and Shipping Process
The Benefits of Exporting Under GST
- Zero-Rated Supplies
Under GST, exports are classified as zero-rated supplies, meaning you don’t need to pay GST on them. This reduces the cost burden significantly. You can export goods or services without worrying about GST liabilities, keeping your cash flow intact.
- Input Tax Credit (ITC)
As an exporter, you can claim refunds on the GST paid for goods or services used to manufacture export products. This covers raw materials, packaging, and even services like freight. By reducing your input costs, you enhance your product’s competitiveness in the global market.
- Simplified Refund Process
You can claim a refund of either the IGST paid or the accumulated unutilised ITC. Refund claims can be processed digitally through the GST portal, significantly speeding up the process. You must file your refund claims within two years from the date of export using Form RFD-01, making it easier to access your funds quickly.
- Export Promotion Schemes
You can also take advantage of various government schemes, like the Export Promotion Capital Goods (EPCG) scheme, which allows duty-free imports of capital goods for export production.
Other schemes like Duty Drawback enable you to claim refunds on duties paid on raw materials used for manufacturing export goods. These schemes help lower your overall production costs and make your exports more competitive globally.
Streamlining Compliance and Documentation
- File Returns on Time
It’s crucial to stay up to date with your GST filings. You must submit GSTR-1 to report your export sales and GSTR-3B to settle your tax liabilities. Missing deadlines can lead to penalties and delays in refunds.
- Maintain Detailed Records
Keeping a clear trail of your export documentation is essential. Maintain accurate records of invoices, shipping bills, and LUT/Bond submissions. This makes it easier to claim refunds and deal with any compliance checks from authorities.
- Automate Processes
Using software or digital platforms to manage your GST filings and export documentation can save you time and reduce errors. Many platforms now allow you to file returns, track shipping, and generate GST-compliant invoices all in one place.
Tax Invoice Details for Exporting Goods
When exporting goods under GST, your tax invoice needs to include several mandatory elements. These details ensure that your transaction is compliant with both domestic and international trade regulations, making it easier to claim GST benefits like refunds or zero-rated supplies.
Here's what you need to include on your tax invoice for exporting goods.
Read More: Customs Compliance and Management Software Solutions
Refund Procedure for Exports Under GST
Claiming refunds on exports under GST is a critical process for maintaining smooth cash flow in your export business. The procedure is designed to ensure that exporters who benefit from zero-rated supplies can efficiently recover the GST paid on inputs.
Here's a detailed breakdown of the step-by-step process to claim refunds for your exports under GST.
1. Filing GSTR-1 to Declare Exports
Your first step is filing GSTR-1, where you declare all export transactions for the tax period. In this form, you must provide detailed information such as the invoice number, shipping bill details, and the value of goods or services exported.
Ensure that all details are accurate, as discrepancies can delay the refund process. This filing helps the authorities track your export data and serves as a base for claiming your GST refund.
2. Filing GSTR-3B to Pay Tax (If IGST is Paid)
If you've paid IGST on your exports (instead of opting for a Letter of Undertaking), you’ll need to file GSTR-3B, the form where you declare your tax liabilities.
Here, you mention the tax paid on exports, and this step is crucial because it allows you to claim an input tax credit or a refund of the IGST paid on your export goods. Accurate reporting of tax liability here is key to avoiding complications in refund claims.
3. Submitting Shipping Bill with Customs
The shipping bill is an essential document filed with customs authorities when exporting goods. It contains all the necessary details, such as the goods' value, destination country, and invoice information.
This document serves as proof of export and is automatically linked to your GST filings. For IGST-paid exports, the shipping bill also acts as the application for your refund, streamlining the process.
4. Applying for a Refund with Form RFD-01
To officially claim a refund, you need to submit Form RFD-01. This form must be filed within two years from the date of export (the date on which the shipping bill was filed). You’ll need to attach supporting documents such as the shipping bill, invoices, and payment details.
Depending on whether you're claiming a refund of IGST or unutilised Input Tax Credit (ITC), the procedure varies slightly. The form submission can be done electronically, reducing manual paperwork and expediting the process.
5. Processing Timeframe of 60 Days by GST Authorities
Once you’ve submitted your refund application, GST authorities will process your claim. Typically, this takes 60 days from the date of application. If all the submitted documents are in order and no discrepancies are found, your refund will be credited directly to your bank account.
Authorities may notify you if they detect issues or require additional information, which may extend the refund period. To prevent delays, it’s essential to keep your documentation clear and accurate.
Key Points to Remember
- Accurate filing is critical at every step to avoid discrepancies and delays in refunds.
- Maintaining proper export documentation (invoices, shipping bills, and tax forms) ensures smoother processing.
- Ensure that the GSTR-1 and GSTR-3B filing for each export cycle is timely and aligns with customs data.
Conclusion: Streamline Your Export Documentation with Pazago
Export documentation can be a complex and time-consuming task, but Pazago simplifies every step of the process.
As an all-in-one EXIM management platform, Pazago supports over 110+ countries, offers 20% cost savings, and reduces turnaround time by 50%.
Key Features:
- Comprehensive Export Documentation: Create, manage, and collaborate on all essential documents, including proforma invoices, certificates of origin, and export licenses.
- Centralized Communication: Use Pazago's Inbox to streamline all trade conversations in one place, ensuring clarity and efficiency.
- Real-Time Shipment Tracking: Track shipments from over 180+ shipping companies in 110+ countries, eliminating the need for multiple websites.
- Inventory Planning: Get real-time alerts for shipment delays, allowing you to adjust your inventory planning proactively.
- Secure International Payments: Enjoy seamless foreign currency payments with priority clearance and the lowest Forex rates.
Why Choose Pazago?
Pazago is your all-in-one solution for protecting your shipments while optimizing logistics operations.
By reducing manual tasks, providing real-time monitoring, and streamlining claims processing, you gain greater control, minimize risk, and save both time and money. Whether you're an exporter, importer, or freight forwarder, Pazago is designed to help your business thrive in the global marketplace.
