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Refunding GST at airports for foreign tourists


Posted on : 11/Jun/2018 19:57:25

A bill has been passed regarding the operation of refunding Goods and Services Tax (GST) for the foreign tourists during the time of the exit from India to their respective nations. The system will be processed in airports when the particular foreign traveler leaves the country and the model for refunding tax is not a new concept as it is handled in different countries such as Singapore, Australia, Germany, France and Japan. In many of the countries the GST and VAT are refunded after a certain threshold level of purchases done by the foreign tourists.

Countries like Australia have minimum expenditure of 300 Australian dollars for the availing of tax refunding benefits. In Singapore the law is somewhat relaxed when compared to other countries, fixing the minimum purchase criteria of SGD 100 (Rs 5000 approx.)

Claiming of the GST imposed on local purchases in the country can be done by the foreign tourists at the airports with some conditions that are being deduced and finalized before the official announcement. For the initial operation the purchases made with big retailers are only accounted for the refund of the GST.

Many field offices have been set up by the central government to bring the system of refunding GST as soon as possible encouraging foreign tourism in the country favorable for the economic flourishment. To avoid fraudulence the initial processes f refunding will be done only on the basis of invoices of the big retailers where the purchase was made. The refund method is present in the GST law for foreign tourists but now the official commencement of the law with the processing bodies are going to be operational within a short span of time. The law ensures the definition of the tourist as a temporary person who do not reside in India and those who stay within the time period of sex months and below for legitimate non-immigrant purposes.

Countries like Singapore, Australia and Germany have multiple agencies running the taxation systems of the country and the provision of refund and quick disbursal of taxes through unified software system. Adapting those kind of advanced technological closed system of refunding tax is very challenging in India and yet the process of keeping a small step in the overall refunding system is expected to influence national tourism.