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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



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