This circular provides clarification on the conditions, manner, and procedure for claiming refund of GST paid on inward supplies of indigenous goods by retail outlets located at the departure area of international airports beyond immigration counters, when such goods are supplied to outgoing international tourists against foreign exchange.

The circular explains that retail outlets situated beyond immigration counters are eligible to claim refund of Central tax, State/UT tax, Integrated tax and Compensation Cess paid on indigenous goods procured from the domestic market, provided such goods are subsequently supplied to eligible international passengers. Supplies made to such passengers are treated as exempt supplies under the relevant GST notifications, and no tax is to be collected from the passenger at the time of sale.

It is clarified that the refund is invoice-based and not in the nature of refund of accumulated input tax credit. Accordingly, input tax credit on such inward supplies is not admissible and must be reversed. No refund is allowed in respect of taxes paid on input services. Retail outlets are required to maintain detailed electronic records of inward supplies and corresponding outward supplies and obtain prescribed passenger details and declarations at the time of sale.

The circular also lays down the procedure for filing refund claims, which are to be submitted manually in FORM GST RFD-10B on a monthly or quarterly basis, along with specified undertakings, returns and invoice details. The process for scrutiny, sanction, and disbursement of refunds by the tax authorities is also prescribed.

These clarifications aim to ensure smooth implementation of the refund scheme and promote tax-free shopping for international tourists.