GST on Export: Understanding the 0.1% GST Rate
What is GST on Export?
The Goods and Services Tax (GST) is a value-added tax levied on the supply of goods and services in India. When it comes to exports, GST is typically not applicable, as the goods and services are being supplied outside India. However, to incentivize exports and promote economic growth, the government has introduced a special GST rate of 0.1% on certain export-oriented goods and services.
What is the 0.1% GST Rate on Export?
As per the GST laws, a nominal GST rate of 0.1% is applicable on certain goods and services that are exported out of India. This rate is significantly lower than the standard GST rates, which range from 5% to 28%. The 0.1% GST rate is intended to reduce the tax burden on exporters and make Indian goods and services more competitive in the global market.
Which Goods and Services are Eligible for the 0.1% GST Rate?
The 0.1% GST rate is applicable on the following goods and services:
- Job work of engineering goods: Job work of engineering goods, including machinery, machinery parts, and other engineering goods, is eligible for the 0.1% GST rate.
- Fabrication of goods: Fabrication of goods, including construction equipment, machinery, and other fabricated goods, is eligible for the 0.1% GST rate.
- Supply of goods to Export Oriented Units (EOUs): Supply of goods to EOUs, which are units set up to export goods and services, is eligible for the 0.1% GST rate.
- Supply of goods to Special Economic Zones (SEZs): Supply of goods to SEZs, which are designated zones for exports, is eligible for the 0.1% GST rate.
How to Avail the 0.1% GST Rate on Export?
To avail the 0.1% GST rate on export, exporters need to follow the following procedures:
- Obtain GST registration: Exporters need to obtain GST registration and file GST returns regularly.
- Claim refund of IGST: Exporters can claim a refund of Integrated GST (IGST) paid on exports.
- Meet documentation requirements: Exporters need to maintain proper documentation, including commercial invoices, packing lists, and bills of lading, to avail the 0.1% GST rate.
Conclusion
The 0.1% GST rate on export is a significant incentive for Indian exporters, enabling them to be more competitive in the global market. To avail this rate, exporters need to follow the prescribed procedures and maintain proper documentation. By promoting exports, the government aims to boost economic growth and create employment opportunities in India.
