Tourists may get GST claims for local purchases at airports
Foreign tourists may soon be able to claim Goods and Services Tax (GST) refunds at airports at the time of exit. It is said that the Revenue Department is working on a mechanism to refund taxes paid by them on local purchases. Initially, only purchases made by tourists from big retailers would be eligible for GST refund at airports when the tourist is leaving the country, an official told PTI. In several countries VAT or GST is refunded to the tourists for purchases made beyond a prescribed threshold.
The Department is working out a mechanism which will ensure refund of GST to foreign tourists and for that the field offices have to be sensitised, the official said. “It has to be ensured that refunds are not claimed on the basis of fake invoices. The refund mechanism could start on the basis of invoices issued by big retailers,” the official said.
A provision for GST refund to tourists have been made in the GST law, but it is yet to be operational. The law has defined the term ‘tourist’ as a person not normally resident in India, who enters India for a stay of not more than six months for legitimate non-immigrant purposes.
Countries like Australia, Germany, France, Singapore, Japan, Malaysia, UK and Switzerland offer VAT or GST refund to international tourists subject to certain conditions. These countries also have a threshold of the minimum amount spent for availing these tax refund advantage.