If you receive payment in dollars, the sale will be covered in export of goods and you will not be liable to pay GST on the sales.
Should I pay GST on the payments I get for sale outside India
I have a sole proprietorship registered in India. I sell my products on Amazon in the USA. So I purchase the products in India and pay GST on such purchases. I have a LUT and send products to the Amazon warehouse in the USA. For every item that sells in the USA, I get the money via NEFT in my Indian bank account. I manage the transactions via Zoho Books and match the payments in my bank account to an export invoice that I create when sending products to the Amazon warehouse. Should I show any GST on this payment? Because Amazon does not give me any invoices for the payments they make to me.
Asked 1 year ago in GST
Dear Sir,
Hope you're doing well.
If you are receiving money in foreign currency then your services will be treated as export of goods and export of goods are nil rated under GST law.
As per the provisions contained under IGST law, export of goods or services or both are to be regarded as “zero-rated supplies” and a person being a registered taxable person exporting such goods or services or both shall be allowed to claim the refund of the GST paid under one of the following two options:
- Export of goods or services or both under bond or letter of undertaking (LUT) without paying any Integrated Tax and can claim the refund of unutilized input credit.
- Export of goods and service or both on the payment of Integrated Tax and the exporter can claim the refund of the GST paid on such goods and services so exported.
We may assist you in entire procedure.
It is advisable to take a phone consultation for detailed discussion.
Dear Sir,
In reference to your query, please note that since your goods are exported out of India and the invoice is also made in the name of an entity outside India, hence accordingly your transaction is export of goods.
In this scenario, since you have an LUT you do not need to charge any tax on such supplies made, however this declaration needs to be clearly mentioned in your invoice "Supply meant for export under letter of undertaking without payment of integrated tax".
Also you would still need to report such invoice in your monthly GST returns (both GSTR 1 & GSTR 3B), providing all outward details including Shipping bill and other information (export related) so as to be able to avail refund of ITC.
In this scenario you may opt for refund of ITC available to you, as per the prescribed procedure.
Another alternative available is to charge GST on the invoice, with the declaration "Supply meant for export on payment of integrated tax".
Of course the transactions would need to be reported in your monthly GST returns (both GSTR 1 & GSTR 3B).
In this scenario, you can avail refund of the tax so paid by you.
Please advise in case of any further clarification.
Thanks & Regards,
CA Aditya Dhanuka.
You need to create an invoice and shipping bill in the name of amazon, if thats happening you dont need to charge GST on sales
- It is an export of goods assuming that the sale consideration is received in convertible foreign currency. Under GST, export of goods or services is treated as zero rated supply. With LUT, you can export goods without payment of GST. The format of export invoice should be accordingly as per the law. Collect FIRC from the bank against each receipt of sale consideration. Also you can claim refund of GST paid on business expenses subject to realization of sale proceeds within the time period prescribed under FEMA Act. If the customer orders goods from India then you should charge GST on the Invoice. The value of sale consideration will be the total amount collected by the Amazon USA (i.e. before the deduction of service charges).
- Under Income tax Act, you can avail the benefit of presumptive taxation scheme u/s 44AD up to turnover of Rs.2Cr. Pay Advance tax on due dates to avoid interest levy.
- For remittances outside India, check applicability of TDS.
- Usually turnover as per ITR and GST returns should match otherwise prepare and maintain reconciliation.
Hi
Exports are zero rated supplies under GST. You don't need to pay any GST on such supplies. Reporting in GSTR 1 and GSTR 3B is mandatory.
I assume you are receiving the money against such supplies in a foreign currency.
Dear Sir,
As per provision of IGST Act if payment is received in foreign currency it will considered as export. Export is zero rated under GST. Therefore no need to charge gst on the same.
For more detail discussion please have a phone call.
Thanks and Regards
Ask a Chartered Accountant
Get tax answers from top-rated CAs in 1 hour. It's quick, easy, and anonymous!
Ask a CA