GST is a destination based consumption tax where in the levy of tax moves along with goods and /or services. GST Refund” is defined under Model GST Law as refund of tax on goods / services exported out of India or on inputs or input services used in the goods / or services which are exported out of India, or refund of tax on supply of goods regarded as “deemed Exports’ or refund of unutilized input tax credit. In simple terms where a goods exporter is not in position to utilize the GST paid in inputs such as raw material , inputs etc. which are used for export of goods shall apply for refund of GST paid by goods exporter. By taking GST Refund Exporter of Goods can increase its business working capital.
Types of Export
- Direct Export : – Direct export is exports where the goods supplied are exported to any country outside India and the payment is received either in Free Foreign Exchange
- Deemed Export : – Those transactions in which goods supplied do not leave country, and payment for such supplies is received either in Indian rupees or in free foreign exchange.
- Third Party Export : – Third party exports are exports made by exporter on behalf of another exporter or manufacturer.