December 2025

Introduction: GST’s Impact on Your Global Business

• The Paradigm Shift: The introduction of Goods and Services Tax (GST) in India fundamentally changed the indirect tax structure, profoundly impacting export and import procedures.

• The Challenge: Businesses engaged in global trade must understand GST’s implications to ensure compliance, avoid penalties, and optimize their working capital through timely refunds.

• The Solution: This guide will demystify Export, Import & GST Details, helping you navigate the tax landscape seamlessly with Globax Solutions.

Section 1: GST on Exports – “Zero-Rated” Supply

Exports are considered “Zero-Rated Supplies” under GST, meaning no GST is levied on exported goods or services, and exporters can claim a refund of input taxes. This is crucial for maintaining competitiveness in international markets.

• Option 1: Export Under LUT/Bond (Without Paying IGST)

  • Process: Exporters can export goods/services without paying Integrated GST (IGST) by furnishing a Letter of Undertaking (LUT) or a Bond.

  • Benefit: This option helps exporters save working capital as they don’t have to pay IGST and then wait for a refund. They can claim a refund of Input Tax Credit (ITC) on inputs/input services used for export.

  • Eligibility: Most exporters can avail this, provided they haven’t been prosecuted for tax evasion exceeding a certain amount.

• Option 2: Export on Payment of IGST (With Claim of Refund)

  • Process: Exporters pay IGST on the goods/services at the time of export and then claim a refund of this paid IGST.

  • Benefit: This is often chosen by new exporters or those who cannot fulfill LUT/Bond conditions.

  • Refund Mechanism: The shipping bill itself (once correctly filed with GST details) acts as the refund application. The refund is processed automatically.

• Key Takeaway: Proper documentation (GSTR-1, GSTR-3B, Shipping Bill matching) is vital for timely refunds under both options.

Section 2: GST on Imports – Integrated GST (IGST)

Imports are treated as “Inter-state supplies” under GST, and hence, IGST is levied on them.

• Customs Duty + IGST: When you import goods into India, you pay Customs Duty (Basic Customs Duty, Social Welfare Surcharge, etc.) PLUS Integrated GST (IGST) and Compensation Cess (if applicable).

• Valuation: IGST is calculated on the assessable value of the imported goods plus any basic customs duty.

• Input Tax Credit (ITC) on Imports: The good news is that the IGST paid on imports can generally be claimed as Input Tax Credit (ITC), provided the imported goods are used for further taxable supplies or for business purposes.

  • Condition: Proper filing of the Bill of Entry with correct GSTIN and details is critical for availing ITC.

• Key Takeaway: While you pay IGST on imports upfront, you can usually recover it as ITC, making it cost-neutral for most businesses.

Section 3: Importance of GSTIN, HSN & Documentation

• GSTIN (Goods and Services Tax Identification Number): Your unique 15-digit number. It must be correctly quoted on all export/import documents (Shipping Bill, Bill of Entry, Commercial Invoice) for proper tax linking and refund processing.

• HSN Code (Harmonized System of Nomenclature): The universal classification system for goods. Correct HSN coding is crucial for accurate IGST calculation on imports and proper classification for exports. Mismatch can lead to delays or incorrect refunds.

• Document Matching: The details in your GSTR-1, GSTR-3B, Shipping Bill, and Bill of Entry must perfectly match. Any discrepancy can hold up your IGST refunds or ITC claims.

Section 4: Common Challenges & How Globax Solutions Helps

• Challenges:

  • Delayed IGST Refunds (cash flow blockage).

  • Mismatch errors in documentation leading to ITC denial.

  • Confusion regarding LUT/Bond procedures.

  • Incorrect HSN classification causing duty/tax discrepancies.

• Globax Solutions Advantage:

  • Expert CHA Services: Our experienced Customs House Agents ensure all export/import documentation (Shipping Bills, Bills of Entry) are filed with 100% accurate GST details, minimizing errors.

  • Seamless Refund Assistance: We guide you through the process for faster IGST refunds and ITC claims, improving your working capital.

  • Compliance Assurance: We keep you updated with the latest GST and Customs notifications, ensuring your global trade operations are always compliant.

  • Integrated Approach: From logistics to customs and tax compliance, we provide an end-to-end solution.