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By: Dr. Sanjiv Agarwal
March 8, 2018
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Section 15 of IGST Act, 2017 deals with refund of IGST paid on supply of goods to tourists leaving India (International Tourist) under Integrated Goods and Services Tax (IGST).

Section 15 of the IGST Act provides for refund to be allowed to ‘tourist’ on supply of goods being taken along by him at the time of leaving India. The refund to be allowed to him is subject to such condition and in the manner as may be prescribed (yet to be prescribed).

Who is a foreign tourist

The term ‘tourist’ has been defined in explanation to section 15 of the IGST Act to mean:

  •    a person not normally resident in India.
  •    who enters India for a stay of not more than six months.
  •    for legitimate non immigrant purpose.

Thus, for being a tourist for the purpose of IGST, the person should be not normally resident in India and maximum stay should not exceed a period of six months.

However, a foreign national who have come to India on a work permit and staying in India for a period exceeding six months will not be categorized as tourist for the purpose of IGST and thus would not be eligible for refund.

The eligibility of refund is only on the goods being taken along with him while leaving India and not on any services used by him while his stay in India.

One of the primary conditions provided by section 15 of IGST for the purpose of refund to the tourist is that refund would be eligible only on goods being taken along with him while leaving India. Thus any goods purchased by him during his stay in India and consumed or disposed off in India will not be eligible for refund of GST paid on such goods.

Why only refund for Goods, not services

GST is a consumption tax. The goods and/or services which are used (consumed) in India, it is the right of India (state of India) where such consumption took place, to collect tax. The goods which are taken along by a tourist can not be considered to be consumed in India and it will be eligible for treatment given to export of goods. Thus, goods taken along by the tourist needs to be free from any taxes in India. Refunding IGST to such tourist is a method by which such goods are made free from taxes in India.

Charging of IGST

Section 10 of the IGST Act provides the rule for place of supply of goods. According to these rules, in case goods supplied with in the same state is a intra state transaction and is chargeable to CGST and SGST. Since, sec 15 of the IGST Act prevails in the case of tourist. The Supplier needs to take the proof of passport and visa of such tourist and then arrange to charge IGST on goods supplied to such tourist. Thus, the passport and copy of visa is an evidence with the supplier in India as the basis for charging IGST on such transactions.

Are Indians on work permit visiting India are tourists

Such Indians coming to India for a short duration can not be considered tourists for the purpose of IGST as section 15 of the IGST Act requires person not normally resident of India and coming to India for legitimate non immigrant purposes. Indians working in other countries remain Indian immigrants only. As such, they are not eligible to be called as tourists.

Prescribed procedure

As on date, no separate procedure has yet been prescribed for refund to be given to international tourists under the IGST Act, 2017.


By: Dr. Sanjiv Agarwal - March 8, 2018


Discussions to this article


Dear Sir,

I have a query regarding selection of place of supply while filling GSTR-1 return in case of sale of Goods to foreign tourist. Which is discussed below:

Section 8 of the IGST Act define what is an Intra State Supply, which is reproduced below

8(1) Subject to the provisions of section 10, supply of goods where the location of the supplier and the place of supply of goods are in the same State or same Union territory shall be treated as intra-State supply:

Provided that the following supply of goods shall not be treated as intra-State supply, namely:––

(i) supply of goods to or by a Special Economic Zone developer or a Special Economic Zone unit;

(ii) goods imported into the territory of India till they cross the customs frontiers of India; or

(iii) supplies made to a tourist referred to in section 15.

That as per the above provision, a supply where place of supply and location of supplier is within the same state, however if the receipt is a foreign tourist the same will be treated as inter state supply.

For a example Mr John of USA ( Fulfills condition of foreign tourist) visits a showroom in Jaipur and purchased some jewellery and goods are handed over to Mr. John on the Showroom itself. In this case the place of Supply is in Rajasthan and location of Supplier is also in Rajasthan, therefore as per normal rule it is a intra state supply. However since Mr. John is a foreign tourist by virtue of the proviso, it becomes an inter state supply. (Similarly like a sale to SEZ Unit)

While Filling GSTR-1, there is exist a problem that when we enter the details in Table 7 i.e Sale to Unregistered Person and select place of Supply as Rajasthan. It opens CGST and SGST only . However the tax charged is IGST due to the facts of the supply being interstate. Then the option left for Filling a the return is with selecting place of supply as other territory to open the IGST column. So kindly guide with this.

In case of Supply to SEZ Unit, they have given a column of tick (Supply to SEZ with or without GST). It is required that a same column should also be given to mark a supply as sale to foreign tourist so that IGST column is enabled

By: Mayank Srivastava
Dated: 03/12/2018


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