IGST ACT

CHAPTER-6 REFUND OF INTEGRATED TAX TO INTERNATIONAL TOURISTS

SECTION-15 Refund of integrated tax paid on supply of goods to tourist leaving India

 SECTION AND RELEVANT RULES

Section 15. Refund of integrated tax paid on supply of goods to tourist leaving India.-

The integrated tax paid by tourist leaving India on any supply of goods taken out of India by him shall be refunded in such manner and subject to such conditions and safeguards as may be prescribed.

Explanation. –For the purposes of this section, the term “tourist” means a person not normally resident in India, who enters India for a stay of not more than six months for legitimate non-immigrant purposes.

 

ANALYTICAL REVIEW

Refund of integrated tax paid on supply of goods to tourist leaving India

This section deals with refund of IGST paid on supply of goods to International Tourist. Tourist are entitled to claim refund of IGST paid on the goods purchased during their stay in India.

For the purposes of this section, the term “tourist” means a person not normally resident in India, who enters India for a stay of not more than six months for legitimate non-immigrant purposes.

As per the proviso to section 8(1) of the IGST Act, 2017, all supplies to tourist will always be treated as Inter-State Supply.

Conditions for availing Refund

  1. Refund would be granted only to goods purchased during their stay in India and being taken along with him while leaving India. Such goods will be eligible for treatment given to export of goods. Hence, goods purchased and consumed in India will not be eligible for refund. The Supplier need to take the proof of passport and visa of such tourist as the basis for charging IGST on such transactions.
  2. Refund verification will be simple, online and allowed at the port-of-exit.

Relevant Case laws

  1. Procedures Under Rule 96 Of CGST Cannot Be Applied To Deny The Legitimate Export Incentive – Madras High Court

M/s Abi Technologies Vs. The Assistant Commissioner of Customs, IGST refunds in W.P. (MD) No. 4562 of 2022 dated 28.04.2022 as cited in 2022 Taxo.online 465

The Hon’ble High Court of Madras held that if in actual there is an export on payment of integrated tax, the procedure prescribed under Rule 96 of the CGST rules is not intended to defeat such legitimate export incentives.

In this case, the petitioner is that it has correctly declared the details of exports made on payment of tax through ITC in GSTR – 1 however, a mistake was committed while filing the GSTR – 3B under rule 61(5) of the CGST Rules, 2017. It was contended on the behalf of the petitioner that the outward supply made by it, would qualify as a Zero-rated supply and should have been shown in Column 3.1 (b) in GSTR – 3B but inadvertently details of the exports has been given as outward taxable supply. It was submitted that similar mistake has been committed for all the three months, due to which the refund of integrated-tax, arising from exports made on payment of tax, has been denied to the petitioner.

The Hon’ble High Court referring to the decision of Commissioner of Sales Tax, U.P. Vs. Auriya Chamber of Commerce, Allahabad as cited in 1986 Taxo.online 2 wherein, it was held that ‘procedures are nothing but handmaids of justice and not mistress of law’, held that the export incentives have been given to encourage exports, for inward remittance of foreign currency. Further, if in actual there is an export with payment of integrated tax, the prescribed procedure under the aforesaid rules is not intended to defeat such legitimate export incentivesThus, the procedure under Rule 96 of the CGST rules, 2017 cannot be applied strictly to deny legitimate export incentives available to an exporter.

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