Impact of GST on Export

Let us discuss today how the GST newly implemented in India is going to affect Indian exporters and Indian export market. There is nothing to worry on GST that will get an positive impact for Indian exporters and the export market if understood correctly. Let us experiment it boldly and apply the same in the correct form to get benefited.

 India’s exports sprouted at its swift pace in these recent years by 4.6% to $ 284.55 billion during the financial year 2016-17, regardless of the demonetisation ferry that actually decelerate domestic economic activity since November.

In March, exports had risen to a hoop from 26.6% to $28.23 billion after clocking a 16.5% jump in February, government surveys also showed that shipment of petroleum products jumped by 70% while engineering goods were up by 48%. India’s rank is 19th out of 30 top exporters worldwide shows the predominance of our export industry. That is why the impact of GST on Export industry is very noteworthy.

  1. What is GST

In simple words, we can say that GST is a tax that is levied on the consumption that is enforced on manufacture sale and consumption of goods & services at a national level. This kind of tax will remain same for all indirect tax levied by state and central government. It is a noteworthy consideration that after introduction of GST some taxes like income tax exports tax, corporate tax including capital gain tax will not be affected in any manner. GST will incorporate of:

  • Centre will levy CGST which is known as Central GST.
  • State will levy SGST which is known as State GST.
  • Lastly the Integrated GST (IGST) that can be will be charged by Central Government on inter-State supply of all goods and services.
  1. Impact to Exporters and Export Industry After Introduction of GST
  • The Feature of input tax credit in GST

The GST will able to assuage the cascading effect of the numerous taxes under the current system of tax. The prerequisite of input tax credit will be accessible to exporters even in the case of state taxes (SGST), which is basically not available to the exporters under the previous tax regime. In other words, one can say that, an input tax credit explicit that while paying tax on the output, one can accentuate the tax that has already been paid on inputs. Accordingly, one does not pay the same tax twice and alternative he can pay only the amount of tax on the value addition done.

This consideration by the government will bring down the costs of inputs and the amount of taxes paid by the exporters. Ultimately this will reduce costs and act as an incentive for the exporters.

  • Spectacular benefits to the exporters:

One of the major benefit to the exporters is that by the incorporation of Central and State taxes in GST with intact set-off on input goods and services and curtailing out of Central Sales Tax (CST) will diminish the cost of locally manufactured goods and services resulting in huge margins to the exporters. As a result, the competitiveness of Indian goods and services in the international market will be increased and Indian exports will be encouraged. This kind of unanimity in tax rates will ultimately bring hassle- free experience across the country which ultimately helps in curtailing the compliance cost.

  • Export schemes such as MEIS and SEIS will consolidate Export Industry

As far as the schemes are considered in India, the Merchandise Exports from India Scheme (MEIS) and the Services Exports from India Scheme (SEIS) that will sustain even after the execution of the GST. Subject to these schemes, exporters with a conclusive amount of turnover are furnished with duty credit scrips. These scrips will empower you for the exemption of duties paid on the import of raw materials. The amount of exemption is explicit as a percentage of the total turnover of the exporter. This will lead to increased benefits to the exporters.

  • Looking Towards the duty drawback scheme

As far as the duty drawback scheme is concerned, the major advantage of this scheme is that the exporters can easily get the refund of the customs and excise duties that are paid on the imported items. The GST legislation has specified the limitation on some of the imported items. So, inference can be drawn that you will get refund of the taxes paid on both imported as well as domestic inputs. This will ultimately benefit the small exporters who are placed in the remote areas where availability of raw material become a headache for these traders.

  • Zero GST rate on exports

This factor will impact the industry in a constructive mode. The complaints of exporters have been meticulously handled, and the aggregate impact of these measures is going to fabricate Indian exports more competitive in the international markets, and give a jostle to the export business in India.

  1. Number of forms to present to get excise tax and sales or VAT refunded

There are four different kinds of forms that are required to be submitted for the refund of the excise and sales tax and they are:

  • C-Form
  • F-Form
  • H-Form
  • ARE 1- Form
  1. Forms required under GST regime of tax for the refund on exports

ARE 1- Form is a form that is submitted to the concerned department for the refund of imports but not it has been removed after the introduction of GST except in cases of commodities to which provisions of Central Excise Act would continue to be applicable.

As discussed earlier that after implementation of GST regime exports would be reckoned at zero-rated supply. Any person asking for the GST refund on exports have the following options namely:

(a) Any person can provide goods or services under any Undertaking or bond with such conditions as may be prescribed in the legislation, without payment of integrated tax and can hold refund of unexploited input tax credit; or

(b) Any person can provide goods or services or both, with such conditions, as may be described, by the payment of claim refund and taxes that are integrated to be paid on goods or services or both supplied, giving due consideration to the provisions that are mentioned in section 54 of the Central Goods and Services Tax Act or the rules provided in the Refund Rules, 2017.

  • If someone belongs to the option (a):

There is a procedure to file refund that has been simply mentioned in the Refund Rules under GST. The exporter asking for the refund of IGST will have to file an application electronically through the Common Portal. Additionally, with the application one has to provide all the relevant documentary evidences as described in the said rules.

  • If someone belongs to the option (b):

The shipping bill claimed by an exporter shall be considered as the application for the refund of integrated tax paid on the goods exported out of India.

Additionally, for both the options as mentioned above, the exporters have to furnish the details of GST invoice in the Shipping bill.

  1. GST as a Replacement for all taxes

The Goods and services tax is a common and uniform indirect tax that should be taxed on all the goods and services produced through exports as well as through imports.  In other words, we can say that GST will be a common platform for all and a single indirect tax which will treat India as one market place. It simply substitutes all the Central as well as state indirect taxes like excise, customs, VAT, state excise, etc


Your Key To Success: how to export

Export consist of two words. Ex and Port. When any goods move out from any port of the home country, the goods become ex at that port and we call it export. Export means selling goods and services for profit to overseas buyers. Export is a very interesting topic and doing this, an exporter can get an opportunity to interact with a folk of people with different talents and can have good experience.


I am going to share my experience through this blog for my journey of export till date started 6 years back.

There are two ways for learning;

  • Learn from your own hard earned experience by experimenting the target field that is true learning but it needs significant time and handsome money investments.
  • Learn from other`s experience that will save your time and money.

I will try to give you some insights on export and import in terms of learning and will share my hard earned experience with you to take inspiration that can show you the possible direction especially for beginners and unexperienced exporters.

The word export looks very catchy and attractive but the scenario is completely different. The word export demands its lovers to gather lot of courage and request them to get ready to face acute pain as soon as he / she goes in. While writing this, I do not intend to make beginners willing to come in the field of export feel nervousness but would want them to stand as rock and fight any hurdle coming on the way to make them own way to reach the destination.

If we talk about what it is export? There are various definition and I will mention few below;

What is export?

Export is to ship goods and services from the home country to overseas buyers. In simple words, export is to take goods to foreign countries by sea, Land and air against the legal transaction of Money.

Export is nothing but to take the goods and services to overseas for profit.  There is another thing of definition for transferring the risk and ownership from exporter to importer as well. Transferring of risk varies depending on incoterms contracts agreeing between exporters and Importers which will be detailed altogether in another coming blog.

Sellers of goods and services is referred as exporter who is based in the host country and overseas buyers of the same is termed as importer who is based in guest country.

Exporting of goods could be regular products, seasonal products and rare products also. Seasonal products mean that the products are made for particular season like warm garments for winter.

Goal of export

  • An exporter can earn Foreign exchange that will help our country`s economy to improve as well to some extent. This is the biggest motivator for the export where he/she will be earning some profit and will be participating in increasing the economic condition of the country in good faith.
  • An exporter will meet with various people and organizations and will exchange loads of ideas.
  • An exporter who is already doing business in the domestic market will have an opportunity to expand its clientele and revenue base in the global market with putting some extra effort to find out a new market for the products established in the domestic market.
    • (For Instance; if a company is doing well in selling at domestic market successfully, there is a good chance for that product to be successful in markets abroad, wherever similar demands exist.)
  • Exploring new horizon of Language and culture and mingling with each other for a better understanding of the market.
  • Finding out a new way of brand growth.

Who can export?

  • Anyone who is willing to export needs to have IEC Code (Importer Exporter Code) issued by DGFT. (To Get IEC code, you can visit this. If any further information needed on the above, I may help you more to get the same)Anyone who has identified the exportable products and is ready to take the risk
  • Anyone who wants to earn foreign exchange and wants to help the nation in economic growth.
  • Anyone who wants to try his luck.
  • Anyone who is continuously updating himself/herself on global scenario of business.

Planning of export

Before you start exporting, plan well and identify the products for export. You can do some research pertaining to demand and supply. Also, choose a target country where you want to export.

My experience on this is that I started like an unguided missile and it took me a long time to identify and define the product for export. In result, I have wasted a lot of quality of time and money and out of an experience, I decided some products to export later.

This is strongly advisable to plan well and choose a suitable product for export to avoid waste of valuable time and loss of hard-earned money.

What products to be exported

There are classes of products coming under different categories and we can identify which products are allowed to be exported and which products are not allowed to be exported.

Classes of Export trade items

  • Free export

It means all the goods listed as “FREE” category can be exported freely and no extra export license except IEC code is required.

  • Prohibited Goods

Any item which is on the list of a prohibited category is not allowed to be exported by the exporter.

  • Restricted Goods

Any item listed in the restricted category is only allowed for export under specific export license guaranteed by the concerned authority.

  • State trade Enterprises

In this case, only government agencies and the likes are allowed to export.

The question will be arising in your mind that how can we know which item comes under which category, Yes it is a brilliant question and you can find out the same on DGFT website entering HS Code. HS code is a harmonized code for a commodity to identify each item at international level for bilateral business at ease. On HS code, I will have a separate blog in detail)

Where to be exported

Along with other things like planning, identifying exportable products, it is also necessary to find out a suitable market where to be exported. (How to find out the market for a specific product, there will be spate blog)

What are stakeholders?

An act of export involves any person or organizations directly or indirect. The fact that facilitators involved in activities of the export process are termed as stakeholders playing a role of pillars where we can build our building of the export.

They are numerated as below;

  • Exporter ( seller of goods)
  • Importer ( buyer of the goods)
  • This can be further elaborated as below;
  • Transport service providers
  • Freight forwarders
  • Banks
  • Insurance providers
  • Custom clearance agents
  • Authority – Custom authority, Environment authority, Standards and Chamber of commerce etc.


Export of goods and services promotes the domestic product across the globe and strengthen the economic situation of the country and it provides a scope for the exporter to explore new market for their products and get them benefitted. If you are interested to explore the horizon of export, you do not need to think more of perfection and nobody is perfect in this world, just start experimenting and the rock the world.