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Registration in case of exporters

In this blog, we look at a query on whether registration is mandatory for a person whose entire turnover purely comprises export of services.

Query:

We are fully export unit providing IT services to US clients. I understand that what we export does not comes under GST. But do we have to register under GST? Is it compulsory for us?

Response:

Yes you would need to obtain a registration.

Registration is mandatory if the value of taxable supplies effected exceeds Rs. 20 lacs. It is important to note that exports are zero-rated supplies and not non-taxable supplies. Hence, it is important that registration be obtained and other compliance procedures duly observed.

Legally, it is important to note that a transaction would qualify as exports, only if the prescribed conditions are fulfilled. Thus, procedure-wise, ‘export’ is a claim that would be made by the supplier and it should go through a test by the tax office – to ensure that the conditions are fulfilled. Thus, it is imperative that an exporter should be registered. Further, an exporter is eligible to claim a refund of input tax credits. This, once again, makes it mandatory that registration is obtained – only a registered person can make an application for refund

 

Legislative reference: Sections 2(6), 2(47), 22 of the CGST Act, 2017 read with Section 16 of the IGST Act, 2017

Authors: Meghana Belawadi and NR Badrinath

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1 Comment

  1. One of the major issues in this case is that the payment should be received in convertible foreign exchange. In most cases, this is not the case as the payment is not received in convertible foreign exchange.

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