Refunds avoid tax cascading or burdening an exporter or business entity with unnecessary tax. Refunds have existed since the introduction of the GST regime in July 2017. Usually, refunds arise in the following circumstances: exports (whether or not tax has been paid), buildup of ITC due to an inverted duty structure, excess payment of tax, and deemed exports.
The refund process is derived from the provisions as laid down in the Central Goods and Services Tax Act of 2017 and the rules made thereunder. Timely and transparent refunds will instill confidence among businesses, especially exporters, competing in the fiercely competitive global economy and relying heavily on cash flow. The government has facilitated this by launching digital platforms for filing refund applications through the GSTN portal to minimise manual intervention and processing time. However, there are still issues that include procedural delays, documentation requirements, and a lack of awareness. Thus, it becomes all the more important for a business to get acquainted with how the refund system under GST works so that they can comply and maximise their working capital.
GST Refunds for Tourists Visiting India under the Goods and Services Act, 2017
In accordance with the Goods and Services Tax (GST) Act of 2017, the Indian Government came up with a provision for GST refunds to foreign tourists so as to promote tourism as well as align with international tax standards. The scheme is premised on the “tax-free shopping” concept that has been generally adopted in other nations to make foreign visitors exempt from paying domestic consumption taxes on items they take out of the country.
Section 15 of the Integrated Goods and Services Tax (IGST) Act, 2017, along with Section 54 of the Central GST (CGST) Act, provides the legislative backdrop for these refunds. It allows a tourist, one who is not normally resident in India and enters the country for a stay of not more than six months on non-immigrant reasons, to claim a refund of GST levied on goods purchased in India and thereafter exported out of the country.
Although this legal provision exists, the actual implementation of this scheme, titled Tourist Refund Scheme (TRS), has not yet been fully implemented in India. The government is going full steam ahead to institute a system and infrastructure, including specific refund counters at airports and integrating with retailers, so that there can be a smooth and prompt refund procedure.
Once it becomes functional, the TRS will allow qualifying tourists to claim their refunds at the point of departure or through online modes, subject to fulfilling certain conditions like minimum buy limits, keeping tax invoices, and physical export of products. The move is expected to boost the attractiveness of India as a shopping hub for foreign tourists and bring India’s GST system in line with international standards. But until such time the system is officially opened and put into operation, overseas travelers are not yet able to get GST refunds on purchases they made in India.
In What Situations Can Tourists Claim GST Refunds?
Foreign tourists to India can avail of a refund of the GST charged on goods purchased by them during their stay, under the GST regime, subject to certain constraints. Though the Tourist Refund Scheme (TRS) has not yet been put to full use, it is mandatorily required under Sections 15 of the IGST Act, 2017, and 54 of the CGST Act, 2017. Once put into operation, tourists will be eligible for GST refunds under the following situations:
1. Import of Goods Meant for Personal Consumption and Export
Tourists are qualified to claim GST refunds for goods (not services) bought during their short visit to India. Such goods should not have been used or consumed in India and personal baggage should be exported out of India on the date of departure.
It should be noted that the charges for hotel stays, food, and travel are not entitled to be refunded under GST under this program.
2. Meeting Documentation and Purchase Requirements
In order to successfully get a refund, the products should be bought from an authorised registered trader under the TRS regime. The invoice for tax should be valid with the inclusion of GST charges. The minimum limit of purchases prescribed by the government should be met.
3. Leaving Approved Airports or Ports
The tourist must:
- Leave from a pre-specified international airport or port where refund counters or electronic refund systems exist.
- Declare the goods and submit them together with the original invoices to be verified upon departure.
4. Compliance with a Prescribed Time Window
The refund claim should be lodged within the pre-prescribed time window, usually prior to or upon departure, depending on the prescribed mechanism.
Eligibility Criteria For Tourists Claiming GST Refunds In India
Foreign tourists visiting India are entitled to recover the GST charged on goods purchased in India if they meet certain eligibility conditions, as specified in Section 15 of the Integrated Goods and Services Tax (IGST) Act, 2017. This move is a part of the new Tourist Refund Scheme (TRS) that aims to boost tourism along with the internationalisation of Indian tax laws.
At present, the Tourist Refund Scheme is not implemented in India. As a result, even tourists qualifying for this benefit cannot receive GST refunds as yet. The government is likely to introduce this scheme in the future by establishing infrastructure and procedures at departure points.
Once implemented, this move will boost the appeal of India as a world-class shopping destination as well as make the country compliant with global tax refund norms.
1. Purchase goods from authorised retailers
Tourists must buy goods (not services) from registered stores that are permitted to participate in the Tourist Refund Scheme. The retailer needs to issue a tax invoice that clearly states the GST charged. There might be a minimum purchase value requirement (set by the government, for example, ₹5,000 or more in total purchases).
2. Stay with a Non-Immigrant Purpose
A tourist may stay temporarily only up to 6 months in India. The purpose of the visit should be non-immigrant, including: tourism, visiting for business, seeking medical treatment, taking part in seminars or cultural events.
3. Foreign Passport Holders
Applicants must have a valid foreign passport. Indian nationals, Persons of Indian Origin (PIOs), and Overseas Citizen of India (OCI) cardholders are ineligible, irrespective of their foreign residence.
4. Purchase of goods from official retailers
The refund applies to goods only and not to services. Goods should be bought from retailers who have registered under the GST regime and are authorised under the Tax Refund Scheme (TRS), if it exists. Tourists will need to have a tax invoice showing the GST paid.
5. The goods have to be exported from India
They must be removed as personal baggage by the tourist. They are not allowed to be used or consumed in India. The refund shall be made only on verification at the point of embarkation (i.e., at international airports).
6. Minimum Purchase Requirement (to be announced)
The state may impose a minimum spending requirement for refunds in order to avoid processing trivial amounts.
7. Application before leaving
Refund applications can only be done at authorised points of exit, i.e., international airports or ports. The tourist has to produce the goods and invoices to be checked.
Documentation For Claiming GST Refunds By Tourists
- International passport, i.e, it should not be Indian or OCI.
- Valid visa or entry permit (Non-immigrant visa (tourist visa), etc.)
- Original GST Tax Invoices showing payment of GST on qualifying goods, issued by qualified GST-registered sellers.
- Proof of purchase date occurring during the stay of the tourist in India.
- Boarding passes and travel tickets to verify departure date and destination from India.
- Exporting goods, i.e, physical goods, are ready for airport check.
- After the plan has been carried out, the refund application form can be filled in online or in hard copy at the time of departure.
- Enter bank account or card details for online refunds.
This is as per expected practices. Until June 2025, the Tourist Refund Scheme (TRS) will not be in operation in India.
Process to Claim GST Refunds By Tourists Visiting India
The Tourist Refund Scheme (TRS) is authorised under statute in the GST Act of 2017, but operationalising it on the ground has not yet occurred. Despite this, according to the provisions made in the IGST Act, 2017 (Section 15) and the CGST Act, 2017 (Section 54), as well as common global practice in refunding tourist tax, the suggested step-by-step procedure through which foreign tourists shall be able to claim GST refunds in India will arguably be as follows:
1. Buy goods from approved retailers
Visitors have to buy goods (not services) from GST-approved traders who are eligible to be a part of the Tourist Refund Scheme. The tax invoice provided by the trader must explicitly mention the GST charged. The government can impose a minimum purchase amount limit, e.g., ₹5,000 or above for total purchases.
2. Provide proper documentation
Travelers must remember the following:
- Produce original tax invoices for all purchases that are eligible.
- Passport and visa copies.
- Boarding pass or travel schedule.
- Proof of departure within six months of arrival.
3. Go to the allotted GST refund counter at the time of departure
To board an international flight from a given airport or seaport, travelers are requested to arrive early for the planned departure time. Hand over the goods, tax invoices, and passport at the GST refund counter or customs counter. Allow checking of goods to verify they are being exported and not eaten in India.
4. Refund application submission
A refund application form (paper or electronic) can be required to be completed at the airport counter or through a government-approved website (to be created in association with the scheme).
The following details may be required:
- Name and passport number
- GST and purchase information
- Proof of leaving (e.g., boarding pass).
5. Customs / GST Officer Verification
The GST or customs officer will verify the identity and travel documents of the traveler. Inspect articles (if necessary). Verify invoices against the goods. Approve or reject refund requests on the spot, or send them for further processing.
6. Mode of Refund
After verification and acceptance, the refund can be issued through:
- Cash payment (in case of small amounts) at airport counters.
- International debit/credit card.
- Transfer to the bank account of the traveler (foreign currency, if required).
- Refund through digital wallets or prepaid cards.
Time limits and conditions for refunds will be specified in the final guidelines.
7. Record-Keeping by Authorities
All refund transactions shall be:
- Digitally recorded.
- Filed with GSTN (Goods and Services Tax Network).
- Available for audit and compliance tracking.
Important notice:
- Up to June 2025, the program is not in operation. Travelers are not yet able to get GST refunds in India.
- Information about refund limits, authorised exit points, and digital platforms will be given at the full launch of the program.
- The policy of refund applies only to goods leaving India and excludes services like hotel stays, eating out, and local transport.
After the program is implemented, it will:
- Enhance the position of India as a shopping destination open to visitors.
- seek to synchronise India’s taxation policies with EU member countries, Singapore, the UAE, and other nations.
- help travelers elude local consumption taxes on goods that are to be exported.
Time Limit for Claiming GST Refund By Tourists
As per the GST process as defined in Section 54 of the CGST Act 2017, tourists are usually supposed to claim the refund of GST at the moment of leaving India. The refund needs to be realised before departing from the country, commonly at specified international airports or ports. Tourists need to show their bought goods, legitimate tax invoices, and a passport for travel purposes. As the refund is subject to the exportation of goods as personal baggage, any delay after departure would invalidate the claim. However, the exact period will be advised upon the introduction of the Tourist Refund Scheme (TRS).
Conclusion
The GST Act, 2017, envisages GST refunds to tourists, showing India’s commitment to the international standards of taxation as well as promoting tourism. While the legislative environment is established, the Tourist Refund Scheme (TRS) has not yet been put into practice. When it becomes operational, it will allow GST reimbursement on goods bought in India for eligible international tourists, thus improving their shopping experience and promoting spending. A smooth and effective refund process will not only enhance tourist satisfaction but also make India a tourist-friendly destination, adhering to worldwide taxation and consumer rights norms.
Related Services
