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How to claim your Input Tax Credit (ITC) from GST if you are a clothing manufacturer exporters in India? - Synerg
Published in: Knowledge Base

How to claim your Input Tax Credit (ITC) from GST if you are a clothing manufacturer exporter?

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As New born or adult clothing exporters in India, you can claim Input Tax Credit (ITC) under the Goods and Services Tax (GST) regime by following specific procedures. Here’s a step-by-step guide:

  1. Ensure GST Registration:
    • Ensure that your clothing export business is registered under GST. GST registration is mandatory for businesses with a certain turnover threshold.
  2. Maintain Proper Documentation:
    • Keep accurate records of all your export-related transactions, including invoices, shipping documents, and other relevant paperwork.
  3. Export under LUT/Bond:
    • To export goods without payment of Integrated Goods and Services Tax (IGST), you can either file a Letter of Undertaking (LUT) or furnish a bond. This is applicable for exports under the GST regime.
  4. Include Correct Details in Invoices:
    • Ensure that your export invoices contain all the necessary details, including the buyer’s GSTIN, shipping details, and other information required for export transactions.
  5. Claim Refund of IGST Paid:
    • As an exporter, you may have paid IGST on inputs and input services. You can claim a refund of this IGST paid on exported goods.
  6. File GST Returns:
    • Regularly file your GST returns, including GSTR-1 and GSTR-3B. Ensure that you accurately report your export sales and claim the eligible ITC in these returns.
  7. Provide Shipping Bill Information:
    • While filing GSTR-1, provide shipping bill details for export transactions. This is crucial for the proper documentation of exports.
  8. Reconciliation with GSTR-2A:
    • Reconcile the ITC claimed with the details available in your GSTR-2A. This is the auto-generated summary of inward supplies.
  9. Track Refund Application Status:
    • After filing for a refund of IGST paid on exports, track the status of your refund application through the GST portal.
  10. Maintain Compliance with GST Laws:
    • Stay updated on any changes in GST laws and compliance requirements to ensure that you are following the latest regulations.
  11. Seek Professional Advice:
    • If you have any uncertainties or complex situations, it’s advisable to seek advice from a tax professional or consultant familiar with GST laws.

Always refer to the latest GST laws and guidelines provided by the Goods and Services Tax Council in India or consult with a tax professional for the most accurate and current information. Keep in mind that the process may evolve, and staying informed about any updates is crucial.