[Opinion] Eligibility of GST Refund on Export Revenue Received through PayPal

The advent of technology has opened doors of ample opportunities for Indian Businesses, and many of them have encashed these opportunities by expanding their horizons and taking their businesses globally.

Many startups and business who provide remote services to the clients based outside India often use online payment gateway such as PayPal or Razor Pay to receive their international payments. They do sobetter convenience and for faster realization. These payment gateways collect the payment from their customer in foreign currency and then transfer that fund to the service provider in Indian Rupees.

When these startups or businesses provide services internationally, it will be an export of service. Indian Government has allowed the refund of GST paid on these service or refund of ITC in respect of Export of services.

GST law place a restriction on realisation of export proceeds in convertible foreign exchange only (Indian Rupees is also permitted in few case).

However, considering that fact that export service is credited in account of these startups in Indian Rupees, GST department used to reject the application for these startups.

Recently, Madras High Court in case of Afortune Trading Research Lab LLP v. Dy Commissioner (GST) [2024] 159 taxmann.com 780 has allowed the refund where export revenue was received through PayPal (Payment gateway).

In this article we will analyze the said order in detail along with legal position involved.

Legal Position

• Export of goods or services
• Supply of goods or services or both [for authorised operations] to a Special Economic Zone developer or a Special Economic Zone unit.

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