Gst refund on export of service

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Anil Vyas (Querist)

25 October 2018 Dear Experts,
Thanks for your continuous valuable suggestions..........
We are exporting Service on payment of IGST and charged GST on value of service. But we received payment from customer after deduction of TDS @ 10%.
Please suggest, GST office will pay:
1. Full value of refund in cash or
2. 90% refund in cash and 10% as GST credit
Regards
Anil Vyas

Rajesh Kumar

Rajesh Kumar (Expert)

25 October 2018 You are exporting your services, and customer is deducting TDS!! Where is customer located?
Yes, if only Indian Customers are deducting TDS, it is okay. In that case you shall get full value of IGST refund, i.e. whatever IGST you have paid at the time of export, it shall be refunded.

Anil Vyas

Anil Vyas (Querist)

25 October 2018 We are exporting service to Japan and Japanese customer deducted TDS and provided TDS certificate issued by Japanese tax office.

Rajesh Kumar

Rajesh Kumar (Expert)

26 October 2018 As far as your question on IGST is concerned, you shall get refund of IGST paid. For remittance part, payment received along with TDS certificate shall suffice for your bank (authorised dealer).
India and Japan has a double taxation avoidance treaty. Article 7 of the agreement says that "The profits of an enterprise of a Contracting State shall be taxable only in that Contracting State unless the enterprise carries on business in the other Contracting State through a permanent establishment situated therein." I suppose that you dont have a PE there in Japan; or even if you have, the present invoicing is from Indian Company. So I dont think any TDS is applicable.
You must raise the issue with your buyer. If you need any legal assistance, kindly let us know.

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