Foreign tourists will soon be able to claim Goods and Services Tax (GST) refunds at the airport when they are leaving the country. The revenue department is working on a mechanism in order to refund their money spent by them on local purchases.
Tourists who would be eligible for Goods and Services Tax (GST) refunds at the airport who purchased from big retailers, an official said.
There are several countries where VAT or GST are repaid to the tourists for purchase made by them.
"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 told.
Although GST refund to tourists is mentioned in the GST law it is yet applied. As per the law, a tourist is a person, not a resident of the country who come to the country for a stay of not more than six months for legitimate non-immigrant purposes
"Internationally, countries like Singapore and Australia have an online robust system connecting multiple refund agencies and retailers on a single platform, offering tourists a seamless and hassle-free experience while verifying, processing and disbursing the tax refunds. Matching such state-of-the-art systems could be a technological nightmare for Indian counterparts," Mohan said.
There are many countries like Germany, France, Australia, Malaysia, Switzerland and United Kingdom which have a threshold of the minimum amount spent for availing these tax refund advantage.
In Singapore, the threshold has been fixed 300 Australian dollars while Japan has been fixed at 5,401 yen (around Rs 3,000), Switzerland 300 Swiss francs and Australia 300 Australian dollars.