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Repair common Windows errors and clear accumulated junk for a smoother, more stable PC - no reinstall needed.Free scan · no reinstallA foreign shipping company cannot claim an Indian GST refund simply because it is foreign or has paid India-related expenses. It must identify a refund ground that applies to its own transactions, meet the relevant registration and tax requirements, and file the evidence required for that claim. If the company makes an eligible zero-rated supply, the law provides two conditional routes: use a bond or Letter of Undertaking (LUT) without paying IGST and seek a refund of eligible unutilized input tax credit, or pay IGST and seek a refund of that tax. Which route, if any, applies depends on the company’s contracts, services, customers, routes and tax treatment.
First identify whose tax and transaction are at issue
Start with the legal entity seeking the refund and the specific tax or input credit it wants returned. A carrier’s own India-facing supplies and Indian purchases are not the same as freight charged by a foreign carrier to an overseas exporter or an Indian importer. The fact that a cost relates to shipping, a port or India does not by itself establish that the foreign company is entitled to a refund.
For each potentially relevant transaction, gather the contract, invoice, proof of payment, service description, route, recipient and recipient location. These details help establish who supplied and received the service, where the supply is treated as taking place, which party bore the tax and what refund ground could apply. The GST Council has discussed international freight and foreign shipping lines, but meeting-agenda material is policy context—not a binding determination of a particular company’s entitlement: 52nd meeting agenda and 49th meeting agenda note.
Check whether the company needs Indian GST registration
A foreign company making taxable supplies in India may need to assess whether it must register as a non-resident taxable person. Do not assume that every foreign shipping line automatically falls into this category: the company’s activities and transaction facts matter. The registration rules for a non-resident taxable person are distinct from the refund rules.
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Under section 27 of the CGST Act, registration is for the period stated in the application or 90 days, whichever is earlier. An officer may extend it for sufficient cause by up to a further 90 days. The applicant must deposit an advance amount equal to its estimated tax liability for the registration period when applying, and may make taxable supplies only after registration is issued. See the CBIC text of section 27.
Choose the refund route that matches the supply
For a qualifying zero-rated supply—an export or a supply to a Special Economic Zone (SEZ) unit or developer—section 16 of the IGST Act provides two routes, subject to the applicable conditions and procedures. These are alternatives for the eligible supply; they are not general remedies for any GST charged on a business expense.
| Route | Tax treatment of the qualifying supply | Refund sought |
|---|---|---|
| Bond or LUT | Make the qualifying zero-rated supply without payment of IGST under bond or Letter of Undertaking. | Refund of eligible unutilized input tax credit, subject to the rules and conditions. |
| Pay IGST | Pay IGST on the qualifying zero-rated supply. | Refund of the IGST paid, subject to the rules and conditions. |
Section 16 has been amended, so check the operative text for the relevant transaction period rather than relying on an older summary. The CBIC provides the current section 16 text; its IGST Act page is another reference.
A company should not treat tax charged on an Indian input as automatically refundable under either zero-rated-supply route. The claim must fit the applicable legal ground, and a refund of unutilized eligible input tax credit is different from a refund of any tax appearing on a purchase invoice.
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The general refund procedure uses electronic FORM GST RFD-01 through the common portal or a notified facilitation centre. The documents depend on the ground claimed. For a refund claim relating to export of services, the rules identify a statement of invoices and relevant bank realization certificates (BRCs) or foreign inward remittance certificates (FIRCs). Other grounds have their own evidence requirements. The CBIC refund rules and Rule 89 set out the procedure and documentary requirements.
Where the claim is for refund of unutilized input tax credit, the rules provide for a corresponding debit from the electronic credit ledger. The CBIC payment rules address the relevant ledger mechanism.
- Link each invoice and credit entry to the particular refund ground being claimed.
- Reconcile the tax invoices, returns and credit-ledger position relevant to the claim.
- For a service-export claim, assemble the invoice statement and applicable BRCs or FIRCs.
- Keep contracts, recipient and route details, and payment records that explain the transaction and support the legal basis asserted.
Do not use the goods-export shipping-bill process for a carrier’s input claim
Rule 96 establishes a separate mechanism for refund of IGST paid on goods exported from India. Under its prescribed conditions, the shipping bill is treated as the refund application when the required export manifest or report has been filed and a valid GSTR-3B return furnished; the rule also addresses mismatches between shipping-bill and return data. This is a route for the exporter’s IGST on exported goods, not a general refund process for a foreign carrier’s GST on inputs. See CBIC Rule 96.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Before filing, test the claim against the actual facts
There is no one-size-fits-all refund entitlement established for foreign shipping companies. Before making a claim, confirm the points that determine whether a particular route is available:
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- Claimant: Which legal entity paid or bore the tax, and is that entity making the claim?
- Supply: What service or goods supply gave rise to the tax, and who contracted for and received it?
- Route and recipient: What was the shipping route, where was the recipient located, and what place-of-supply treatment applies?
- Registration and compliance: Was registration required, and are the relevant returns and tax records in order?
- Refund ground: Is the claim for IGST paid on an eligible zero-rated supply, eligible unutilized input tax credit, or another recognized ground?
- Evidence: Do the invoices, payment records, export or remittance documents and ledger entries support that ground?
Rules, notifications and portal requirements can change. Check the provisions and filing requirements that apply to the transaction period before submitting a claim; for a foreign shipping line, contracts, service recipient, route and tax-payment mechanism may require transaction-specific Indian GST advice.
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