Many countries around the world offer tax refunds to foreign visitors as a part of their efforts to boost tourism. Singapore is a prime example where tourists can claim their GST refunds at kiosks peppered around Singapore’s Changi Airport. And it looks like Hyderabad may become the first airport in India to offer a GST refund at Indian airports.
As per a Time of India article, the Indian indirect tax authorities are working on a mechanism where foreign tourists can claim GST refunds on goods purchases in the country. Hyderabad airport has been chosen as the test bed for this new scheme. The plan is to set up kiosks where people visiting India can submit their bills and get a tax refund on their purchases.
There has been no announcement regarding when this new system will come online. But we know that one would be able to claim these refunds at the customs area.
Now, who is eligible for this scheme? You have to be a non-resident, having stayed in the country for less than six months. The purpose of your visit should also be non-immigrational. There is still no clarity whether NRIs are eligible for these refunds or not.
Do remember that the refunds are only available on goods purchased in India. Taxes paid on services are not refundable which is in line with standard global practices. So don’t go to the GST refund kiosk with your spa or hotel bills.
This new GST-refund plan is part of the Indian government’s efforts to make visitors spend more in the country. We hope that the process of getting a refund is as frictionless as possible, although not very confident given the Indian knack for piling on tonnes of paperwork. Globally, such work is outsourced to specific companies who process GST refunds for tourists, and perhaps it would be an idea for the Indian government to also hand it out to them.
What do you think about this move? Will it boost tourism revenue in India?