The tax invoice for an export
An export is a supply under GST like any other, so it needs a tax invoice. Exports are zero-rated: the buyer abroad pays no Indian tax. You still account for the supply in rupees, report it in your GSTR-1 and either pay IGST and get it back, or ship under a Letter of Undertaking without paying it. The tax invoice is the record of that.
Many exporters issue one export invoice that serves as both the commercial invoice and the tax invoice. Others, like the layout here, raise a separate tax invoice in rupees beside the commercial invoice in dollars or euros. Either works, as long as the two agree on the goods, the quantities and the value.
What it has to show
The export line. "Supply meant for export on payment of IGST" or "supply meant for export under Letter of Undertaking without payment of IGST". It goes under the title, and it decides how the export is treated in your returns and at the refund.
Your GSTIN, and a number unique for the year. The invoice number has to be unique within the financial year. Most exporters keep a separate series for export invoices.
HS code, taxable value, IGST rate and amount, line by line. The taxable value is in rupees, converted at the rate customs notifies for the date of the shipping bill. Show the rate you used.
The consignee, the buyer and the destination. Who the goods go to, who is paying if that is someone else, the country of destination and the port of discharge.
The FOB, freight and insurance. They show how the price is made up. Customs and the IGST refund look at the FOB value.
IGST or LUT: which suits you
Exporting under LUT keeps your cash free: you pay no IGST on the export and claim a refund of the input tax credit instead. You file the LUT online each financial year, in Form GST RFD-11, and quote its ARN on your invoices. Paying IGST suits exporters who build up input tax they cannot otherwise use. The IGST paid on the export is refunded automatically once the shipping bill and GSTR-1 match, so it pays to get the invoice right first time.
Mistakes that cost exporters money
- A tax invoice that differs from the shipping bill. The IGST refund is held until the invoice number, the value and the IGST in your GSTR-1 match the shipping bill.
- A rate of exchange of your own choosing. Use the customs notified rate for the shipping bill date, or the values will not match.
- The wrong line for how you export. An invoice that says LUT while IGST was paid, or the other way round, is a mismatch in your returns.
- A lapsed LUT. It is filed once a financial year. Shipping without IGST on an LUT that has lapsed leaves you owing the tax.