Payment terms export GST

Under current Indian regulations, the timelines for the realization and repatriation of export proceeds are governed by the Foreign Exchange Management Act (FEMA), which in turn influences GST compliance.

1. Realization Timeline (FEMA)

As per the recent EXIM Guidelines issued by the Reserve Bank of India (RBI) in 2026, the standard timeline for the realization and repatriation of export proceeds for both goods and services is 15 months from the date of export (for goods) or the date of the invoice (for services).

• Extension: If you are unable to realize the payment within 15 months, you must apply to your Authorised Dealer (AD) Bank for an extension before the expiry of the 15-month period.

• INR Settlements: For exports invoiced and/or settled in Indian Rupees (INR), the realization period is extended to 18 months.

2. Impact on GST

The GST law is linked to the realization of export proceeds, particularly if you are exporting under a Letter of Undertaking (LUT) or claiming refunds.

• Exports under LUT (Without Payment of IGST): If you export services without payment of IGST under an LUT, you are required to receive the payment within the prescribed FEMA timeline. If you fail to realize the export proceeds within 15 months (or any extended period allowed by the authorities), you become liable to pay the IGST due on the transaction, along with applicable interest, within 15 days of the expiry of that period.

• Refunds: If you have already claimed a refund of unutilized Input Tax Credit (ITC) or IGST paid on exports, and the export proceeds are not realized within the FEMA timeline, you are generally required to pay back the refund amount along with interest to the government.

Summary of Key Points

Recommendation: It is advisable to maintain clear documentation of all your export invoices and follow up on payments well before the 15-month deadline to avoid triggering GST liabilities or refund reversals. If you anticipate a delay, communicate early with your AD Bank to seek a formal extension.