GST on pure export of services

[Kaustubh Karandikar]

XYZ is having only export of services transactions and his turnover has exceeded the threshold limit of ₹.20 Lacs. Is he required to register with GST even if export of services are exempted from GST? If yes under which provisions?

[Amit Agrawal]

Export of services are not exempt service but zero-rated u/s 16 of the IGST Act, 2017.

And zero-rated supply is different from NIL rated / exempt supplies & this position of law becomes more clear when one read Section 16 (2) of the IGST Act, 2017. Consequently, benefit of Section 23 of the CGST Act, 2017 cannot be claimed.

In other words, XYZ is liable to registration u/s 22 when threshold aggregate turnover limit is crossed even when its entire turnover is only for services exported.

These are ex facie views of mine and the same should not be construed as professional advice / suggestion.

[Amit Agrawal]

Kindly also note that export of service is inter-state supply and Notification No. 10/2017 – Integrated Tax facilitate exemption from registration (despite Section 24 (i)) only till one reaches specified limits of aggregate turnover of 20 Lac / 10 Lac as the case may be in a financial year.

These are ex facie views of mine and the same should not be construed as professional advice / suggestion.

[Amit Agrawal]

In my first post above, please read as .....Consequently, benefit of Section 23 (1)(a) of the CGST Act, 2017 cannot be claimed.

Notification No. 10/2017 – Integrated Tax (as referred and explained in my second post) is issued using Section 23 (2) of the CGST Act, 2017.

[KASTURI SETHI]

Sh.Amit Agrawal Ji,

Your reply is comprehensive and full of substance.Keeping in view of your continuous participation, I am very happy. I eagerly wait for your reply first.

[Ganeshan Kalyani]

Sri Kasturi Sir you have rightly said. Sri Amit Sir replies has covered all aspects and cleared doubts well with the reference to section. Sri Amit Sir thanks.

[Amit Agrawal]

Thank you very much, Shri Kasturi Sethi Ji & Shri Ganeshan Kalyani Ji, for your kind words!

Both of doing all this for so many years together now, helping lots of people in the process. And my contribution is nothing compared to efforts you have put over all these years on TMI.

[Amit Agrawal]

*Both of you

AI Summary

Zero-rated export of services does not remove the GST registration obligation once turnover exceeds the threshold. Export of services are zero-rated supplies distinct from exempt supplies; therefore, when aggregate turnover exceeds the statutory threshold a supplier engaged solely in export of services is required to register for GST. A notification grants a temporary registration exemption for inter-state supplies including exports up to specified turnover limits, but does not alter the underlying registration obligation once those limits are exceeded.