GST Refund to Foreign Tourists: Govt working on Rules & Procedures

Foreign tourists may soon be able to get GST refunds in respect of their shopping of goods and services in India, as the government is working on procedures and rules for long-pending implementation of such provisions of IGST Act.

As per news reports, the Indian government is currently working on implementing a procedure for foreign tourists to obtain GST refunds for their purchases of goods and services in the country. This initiative has been long-awaited and the government is actively pursuing its implementation.

Accordingly, the rules and procedures for GST refunds to foreign tourists will be established soon. This move aligns with the Integrated GST Act that already provides for GST refunds to foreign tourists for local shopping that is taken out of the country. As per Section 15 of the IGST Act, tourists leaving India after a stay of not more than six months can claim a refund on the tax paid for any supply of goods taken out of India.

Many countries allow foreign tourists to claim a refund of GST, as taxes are not exported or there are no taxes on exports. Consequently, foreign tourists can request GST refunds at the airport when departing.

GST regime is now adequately stable and duly established in India, therefore the mechanism for refund of GST to foreign tourists is being developed or implemented, to close the pending aspects for completion of the GST regime.

This proposal is expected to be discussed and approved at the upcoming GST Council meetings, with the possibility of a soft launch through a pilot run before full implementation.

The government is likely to take up the matter of implementing GST refunds for foreign tourists soon, as it could provide a boost to domestic tourism, particularly in the face of the Covid-19 pandemic, in accordance with suggestions from the trade and industry.