Export supply pay igst how?

Sir, for this the government has come up with the conclusion that the dealer who is engaged in the business of Exports and do not want to pay IGST for the purchases made he has to submit either Bond/Bank Gurantee or he should obtain Letter to Undertaking (LUT) from the concerned authorities of State or Center which ever is applicable.

Correction : Sales made instead of Purchases made.

Exporter has 2 option.

1) make bond or LOU.

2) Pay Gst on Output supply.

But my question is on no. 2.

If export supply is zero rated (0%) supply then how exporter pay gst on output for example 5%, 12%,18% etc?

Export is zero rated but the goods/service may not be zero rated, in such case pay applicable IGST and claim refund of such amount paid at later date through refund process.

What is the correct rules according to law:-

1) Collect IGST on output  from customer then pay to the govt. and then apply for refund? (If it is correct then it's illogical provision)

OR,

2) Don't collect IGST on output  from customer. Pay IGST from my Own pockets on output and then apply for refund?

GST,being a consumption based tax, if you see in case of imports from different country, place of supply had to be that other country and accordingly GST collected there. This is the main reason exports are considered as zero rated supply as government can't levy tax beyond its territorial boundry. So, your first proposal, stating "collecting tax from customer" is totally wrong both lawfully and concept wise as government can't charge from a person who is not even in the territory of India.

Secondly, then what does "Payment of IGST on export and claiming of refund later" as provided in law means:--- See, main concept of giving benefit of refund is that, government is giving option/ way to supplier to utilise his input tax credit, as if not given such option it would be impossible for exporters to use their credits  and thereby it would be a loss to exporters which they would cover by raising price of their good which subequently would reduce exports.

 So, 1st option given by government (LUT/Bond) is clear, that don't pay IGST, claim credit of your input tax as refund.

Now 2nd option (paying IGST on export) , it means pay applicable IGST on goods/service as applicable and claim refund of tax paid. Now, question is how to pay this IGST on export as you are saying does supplier has to pay from his pocket? So, here supplier can utilise his input credit to pay this output IGST and calim refund of tax paid now. If in situations IGST on export is more than credit available, then pay balance amount as cash after utilising credit and claim refund of entire tax paid.

Hope it is clear now!!

IGST not payable for exports since zero rated. However there should be a Letter of Undertaking / bond or bank guarantee to be obtained from respective GST Officer and the export invoice should contain "supply of goods meant for export under bond or LUT without payment of IGST"

Pay the igst to govt and Same will refunded after filing the return,and file refune in form RFD-01