Key Statutory Takeaways
- Exports of goods and services qualify as Zero-Rated Supplies under Section 16 of the IGST Act, 2017, ensuring domestic input taxes are not exported.
- Exporters operating under Form GST RFD-11 (LUT) preserve working capital upfront and claim periodic refunds of accumulated Input Tax Credit via Form RFD-01.
- Accurate matching between GSTR-1 Table 6A, ICEGATE Shipping Bills (EGM filed), and e-BRC / FIRC realization certificates is decisive for smooth refund sanction.
Chennai and the historic Periamet commercial corridor represent major hubs for leather goods, footwear, textiles, engineering components, and technology service exports. Selecting the right GST zero-rating mechanism directly impacts working-capital liquidity.
1. Two Statutory Routes under Section 16(3) of the IGST Act
Subject to notified commodity restrictions, an exporter may either: (a) supply goods or services under a Letter of Undertaking (LUT in Form RFD-11) without payment of IGST and claim refund of unutilized ITC under Rule 89(4), or (b) where permitted, export on payment of IGST utilizing eligible ITC and receive automated customs scroll refund on shipping bills under Rule 96.
2. Critical Documentation Checkpoints for RFD-01 Claims
- Valid LUT ARN obtained prior to issuance of zero-rated export invoices for the relevant financial year.
- Alignment of Port Code, Shipping Bill Number, Shipping Bill Date, and FOB/Invoice values across Tax Invoices, ICEGATE, and GSTR-1 Table 6A.
- For export of services, matching of Foreign Inward Remittance Certificates (FIRC) / e-BRC with contract milestones within RBI FEMA realization timelines.
Prepared by the Research Desk — Tipu & Company, Chartered Accountants
Disclaimer: This briefing is intended solely for general informational guidance and should not be construed as a formal tax or legal opinion on specific facts.
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