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Updated on : April 24, 2025

Exports Under GST : Deemed Exports, Forms for Refunds

(Navigate Zero-Rated Supplies, Understand Deemed Exports, and Master Refund Formalities)

For businesses venturing into the global market, a clear understanding of the Goods and Services Tax (GST) implications on exports is paramount. The GST framework in India treats exports as zero-rated supplies, offering significant benefits.

This comprehensive guide by DisyTax delves into the intricacies of exports under GST, clearly distinguishing between direct and deemed exports, and providing an in-depth understanding of the essential forms for GST refunds applicable to both.

Understanding the Core: Exports as Zero-Rated Supplies Under GST (Exports Under GST, GST on Exports)

The fundamental principle governing GST on exports is that they are considered zero-rated supplies. This means that no GST is levied on the exported goods or services. Furthermore, exporters are entitled to claim a refund of the Input Tax Credit (ITC) paid on the inputs and input services used in the production or supply of these exported goods or services, thereby ensuring that the tax burden is not exported.

Distinguishing Between Direct Exports and Deemed Exports Under GST

It’s crucial to differentiate between direct exports and deemed exports:

Direct Exports: These involve the physical movement of goods out of India or the supply of services to a recipient outside India.

Deemed Exports (Deemed Exports GST, Deemed Exports Meaning): These refer to specific categories of domestic supplies of goods that are treated as exports for the purpose of availing certain benefits, including refunds, even though the goods do not physically leave India.

What Constitutes Deemed Exports Under GST?

As per the GST Act, the following supplies of goods are classified as deemed exports:

Supply to Advance Authorisation holder: Example: A manufacturer supplying raw materials to another manufacturer holding an Advance Authorisation license for producing goods meant for export.

Supply to EPCG Authorisation holder: Example: A supplier providing capital goods to an entity that has obtained an Export Promotion Capital Goods license for manufacturing export products.

Supply to EOU/STP/EHTP units: Example: A domestic supplier providing components to a unit operating under the Export Oriented Unit scheme.

Supply of gold by banks/PSUs to Advance Authorisation holders: Example: A designated bank supplying gold to a jeweler holding an Advance Authorisation for export of gold jewelry.

Supply to projects funded by multilateral/bilateral agencies: Example: A supplier providing goods to a project in India funded by the World Bank or the United Nations.

Supply to projects under International Competitive Bidding (ICB): Example: A domestic manufacturer supplying equipment to a power project in India that was awarded through an international bidding process with specific funding conditions.

The Advantages of Deemed Export Status Under GST (Benefits of Deemed Exports GST)

The classification of certain domestic supplies as deemed exports provides significant advantages to the suppliers:

Refund of Input Tax Credit (ITC) (GST Refund for Deemed Exports): Suppliers of deemed export goods are eligible to claim a refund of the ITC paid on the inputs used in their manufacture.

Reduced Working Capital Blockage: By claiming refunds, suppliers can free up their working capital that would otherwise be tied up in taxes.

Level Playing Field: It provides benefits similar to direct exporters, encouraging domestic manufacturing for export-oriented sectors.

GST Refund on Exports: Navigating the Options (GST Refund on Exports)

Exporters have two primary options for claiming refunds under GST:

Payment of IGST and Subsequent Refund: Exporters can pay the Integrated Goods and Services Tax (IGST) on their export supplies and subsequently claim a refund of the IGST paid.

Export Under LUT/Bond and Refund of ITC (Letter of Undertaking (LUT) GST): Exporters can choose to export goods or services under a Letter of Undertaking (LUT) or a bond without paying IGST upfront.

In this case, they can claim a refund of the accumulated Input Tax Credit (ITC) on the inputs used in making those exports.

Furnishing an LUT (in Form GST RFD-11) simplifies the process for many exporters.

GST Refund on Deemed Exports: The Specific Mechanism

For deemed exports, the refund can be claimed either by the supplier or the recipient of the deemed export supplies, depending on the specific category and the agreements between them.

Typically, the recipient (e.g., the EOU unit or the Advance Authorisation holder) might claim the refund of the taxes paid by the supplier.

The exact procedure is often specified in the relevant GST notifications.

Key Forms for Claiming GST Refund on Exports and Deemed Exports

Several forms are crucial for claiming GST refunds related to both direct and deemed exports:

GST RFD-01: Application for Refund: This is the primary form for claiming any GST refund, including those related to exports and deemed exports.

You need to file this application electronically on the GST portal, selecting the appropriate ground for the refund (e.g., “Export of goods or services without payment of tax,” “Export of goods or services with payment of tax,” or specific grounds related to supplies to SEZ units/developers which can cover certain deemed export categories).

GST RFD-11: Letter of Undertaking (LUT): If you intend to export goods or services without paying IGST, you need to furnish a Letter of Undertaking (LUT) in Form GST RFD-11 online on the GST portal.

This is typically done by exporters who wish to claim a refund of their accumulated ITC.

Other Supporting Documents: Depending on the nature of your export or deemed export supply and the specific refund claim, you will need to submit various supporting documents, such as invoices, export documents (shipping bills, airway bills), proof of receipt by the recipient (for deemed exports), and relevant authorization certificates.

Process for Claiming GST Refund on Exports and Deemed Exports

The general process for claiming GST refunds involves these key steps:

Prepare All Necessary Documentation: Gather all required invoices, export documents (for direct exports), authorization letters (for deemed exports), and other supporting documents as per GST rules.

File the Refund Application (GST RFD-01): Log in to the GST portal and navigate to “Services” > “Refunds” > “Application for Refund.”

Select the appropriate refund type and fill in all the required details accurately.

Upload Supporting Documents: Upload scanned copies of all the necessary supporting documents as specified by the GST portal.

Submit the Application: Submit the refund application using your Digital Signature Certificate (DSC) or through OTP verification.

Verification by Tax Authorities: The GST authorities will review your application and the submitted documents.

They may raise queries or request additional information.

Sanctioning and Disbursement: If your claim is found to be valid, the tax authorities will sanction the refund amount, which will be directly credited to your bank account registered with the GST portal.

Important Conditions for Claiming GST Refund on Exports and Deemed Exports:

The supplies must qualify as either direct exports or fall under the notified categories of deemed exports.

All invoices and relevant documents must comply with the GST rules and regulations.

The refund application must be filed within two years from the relevant date (e.g., the date of export for direct exports or the date of supply for deemed exports).

For exports under LUT/Bond, the conditions specified in the LUT/Bond must be adhered to.

For deemed exports, the specific conditions mentioned in the notifications related to each category must be fulfilled.

Key Documents Required for GST Refund on Exports and Deemed Exports:

While the specific documents may vary, some common requirements include:

Tax invoices for the export or deemed export supply.
Invoices for the inputs and input services on which ITC is claimed.
For direct exports: Shipping bills, airway bills, bills of lading, etc.
For deemed exports: Relevant authorization certificates (e.g., Advance Authorisation, EPCG), proof of supply to the recipient.
Bank account details registered with the GST portal.
Undertakings or declarations as may be required.

How DisyTax Simplifies GST for Your Export Business (DisyTax GST for Exports)

Navigating the complexities of GST on exports, including understanding deemed exports and managing GST refunds, can be a significant undertaking.

DisyTax offers comprehensive solutions and expert support to streamline your export-related GST compliance:

Accurate Classification of Export Supplies: We help you correctly classify your supplies as direct exports or deemed exports to ensure you avail the right benefits.
Assistance with LUT/Bond Filing: Our platform guides you through the process of furnishing the Letter of Undertaking (LUT) or Bond on the GST portal.
Expert Guidance on Refund Procedures: We provide step-by-step guidance on preparing and filing your GST refund applications (GST RFD-01) for both direct and deemed exports.
Documentation Checklist and Support: We help you identify and organize all the necessary documents required for your refund claims, ensuring completeness and accuracy.
Compliance with the Latest Regulations: We keep you updated on the latest GST rules and notifications related to exports, ensuring your compliance.

Conclusion: Empowering Your Export Ventures with GST Expertise

Understanding the nuances of exports under GST, particularly the provisions for deemed exports and the correct procedures for claiming GST refunds using the relevant forms, is crucial for the success of your export business.

By staying informed and leveraging the right expertise and tools, you can navigate the GST landscape effectively, optimize your cash flow, and focus on expanding your global footprint.

Partner with DisyTax to simplify your export-related GST compliance and unlock the full potential of your international trade endeavors.

For the most accurate and up-to-date information, always refer to the official GST portal: https://www.gst.gov.in/.

FAQs on Export under GST

How are exports treated under GST in India?

Under GST, exports of goods and services are treated as ‘Zero-Rated Supplies’. This means the goods or services exported are relieved of GST, either at the input stage or the final product stage, to ensure that only domestic consumption is taxed and exports are competitive globally.

What are the two options available for exporting goods or services under GST?

An exporter has two main options: a) Export without payment of IGST, by furnishing a Letter of Undertaking (LUT) or a Bond. In this case, the exporter can claim a refund of accumulated Input Tax Credit (ITC) on inputs/input services used for the export. b) Export on payment of IGST, by utilizing available ITC or paying in cash. The exporter can then claim a refund of the IGST paid on the export

What is Zero-Rated Supply under GST? How is it different from Exempt Supply?

Zero-Rated Supply means the supply is taxed at 0% and, crucially, the supplier is eligible to claim a refund of the Input Tax Credit (ITC) accumulated on inputs used for making such supply. Exempt Supply also has a 0% tax rate, but the supplier cannot claim ITC on inputs used for making exempt supplies. Zero-rating ensures taxes on inputs are not exported.

Who is eligible to export under Letter of Undertaking (LUT) without paying IGST?

Any registered person can export under LUT, except those who have been prosecuted for any offence under the GST Act or any earlier law where the tax evasion exceeded ₹2.5 Crore. LUT is valid for the entire financial year and needs to be renewed annually. Those not eligible for LUT must export under Bond

How is the refund of IGST paid on export of goods claimed?

When goods are exported on payment of IGST, the shipping bill filed with Customs is treated as an application for refund of IGST. Upon successful customs clearance and matching of the details in the shipping bill with the corresponding export details furnished in GSTR-1 and GSTR-3B, the refund is usually processed automatically by Customs (integrated with GST portal) and credited to the exporter’s bank account. No separate refund application (RFD-01) is required for this.

How is the refund of accumulated ITC claimed when exporting without payment of IGST (under LUT/Bond)?

When exporting under LUT/Bond, no IGST is paid on the export supply. However, the exporter may have accumulated ITC on their inputs/input services. To claim a refund of this unutilized ITC, the exporter needs to file a refund application in Form GST RFD-01 through the GST portal, providing details of the zero-rated supplies and the accumulated ITC.

What are the conditions to qualify a service as 'Export of Service' under GST?

For a supply of service to be considered an ‘Export of Service’ under GST, all the following conditions must be met: a) The supplier of the service is located in India. b) The recipient of the service is located outside India. c) The place of supply of the service is outside India. d) The payment for the service has been received by the supplier in convertible foreign exchange (or in Indian Rupees wherever permitted by RBI). e) The supplier and recipient are not merely establishments of a distinct person (as defined in Section 8 of the IGST Act).

What documents are typically required for export under GST?

Key documents include:

Tax Invoice (endorsed with “Supply Meant for Export on Payment of IGST” or “Supply Meant for Export Without Payment of IGST under LUT/Bond”).
Shipping Bill (for goods) or Bill of Export.
Export General Manifest (EGM) filed by the carrier.
Bank Realisation Certificate (BRC) or Foreign Inward Remittance Certificate (FIRC) as proof of foreign exchange receipt (especially for services).
Letter of Undertaking (LUT) or Bond copy (if exporting without IGST payment).
Packing List, Bill of Lading/Air Waybill, etc. (depending on the nature of goods/mode of transport).

What is 'Deemed Export' under GST? How is it different from regular export?

Deemed Export’ refers to certain supplies of goods manufactured in India which are notified by the Government as deemed exports, where the goods supplied do not leave India, and payment is received in INR or convertible foreign exchange. Unlike regular exports (which are zero-rated), deemed exports are taxable (though often at a concessional rate like 0.1%), but the supplier or the recipient is eligible to claim a refund of the tax paid. Examples include certain supplies to EOUs, Advance Authorisation holders, EPCG holders, etc.

Is GST registration mandatory for exporters?

Generally, yes. As exports are treated as inter-state supplies under GST, persons making zero-rated supplies (including exports) are required to compulsorily register under Section 24 of the CGST Act, 2017, irrespective of their aggregate turnover, in order to avail the benefits of zero-rating (like claiming ITC refund).

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