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EXPORT WITH IGST

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Mohit Agrawal

25 Points Posted on 01 March 2023

In the case of export of services from India, if you are not opting for LUT (Letter of Undertaking) and instead choosing to pay IGST (Integrated Goods and Services Tax), you will need to generate a sales invoice with IGST applied to the taxable value of the services being exported.

When you charge IGST on the invoice,will the buyer of the services would be required to pay the full invoice amount inclusive of IGST? I dont think so , how do we deal with the scenario where the buyer dont pay taxes to the seller and just pay the invoice without GST ?It seems very odd that the seller would raise invoice with taxes while the buyer will pay without tax

Replies (5)

Quick Summary

When exporting services from India and opting to pay IGST instead of using an LUT, you'll issue a sales invoice with IGST applied. However, overseas buyers typically pay only the service value, not the IGST. The IGST amount on the tax invoice is for Indian GST and customs compliance. You should provide the buyer with a commercial invoice in foreign currency without GST. The IGST paid can then be claimed as a refund from the customs department via ICEGATE, though this process can sometimes be complex.

CA Raj Doshi

Practising CA

5649 Points Posted on 02 March 2023

The tax invoice mentioning igst is only for gst and customs purposes. The buyer is generally sent a commercial invoice in foreign currency without GST amount

CA Raj Doshi

Practising CA

5649 Points Posted on 02 March 2023

Go for shipping bill amendment and then do the changes in gstr 1 and 3b. So the refund will come into your account. It's a risky process and might require good outlay if the refund gets stuck through automatic route.

Sneha Latha

Senior Assistant

109 Points Posted on 02 March 2023

In case of export of service, shipping bill will not be available.

HS Negi

Manager Indirect Taxation

24 Points Posted on 02 March 2023

Tax Invoice is being issued for compliance of GST either you opt for LUT or not. However dealing with overseas buyer you have to provide them commercial invoice in convertible currency.

sudama kumar

24 Points Posted on 03 March 2023

You can send invoice with payment of igst. costomer send payment only without igst amount. and your igst will be refunded from customs department. you can apply to refund gst amount to icegate