The Government of India is starting a pilot project to refund the “goods and services tax” – GST – to foreign tourists visiting India. The comprehensive GST law was passed five years ago.
According to the law, tourists and persons who are not residents of India and stay in the country for no more than six months are entitled to a refund of a part of the cost of goods exported abroad.
The GST refund system, i.e. VAT, is in effect in many countries. The tax for goods whose value exceeds the threshold value can be refunded, and this can be done right at the airport of departure after passport control or by transfer to your bank card.
Tax experts said that several changes to the current system are required to implement the plan, and this will take time.
The government will have to prescribe the rules and the entire refund procedure, including a mechanism for checking whether the buyer paid GST since often the tax amount is not separately allocated on the check. At the same time, the provisions of the mechanism should ensure that tourists are promptly reimbursed for their purchases without unnecessary paperwork – no more difficult than in duty-free shops at airports.