India Simplifies GST Refund of Exports Remittances in Special Rupee Vostro Accounts ( October 13, 2023 )

Exporters in India will gain from the GST Council’s clear guidance on Special Rupee Vostro Accounts (SRVA) remittances, easing GST refund procedures in Special Economic Zones (SEZs). The ability for exporters to claim IGST refunds on supplies to SEZ units is expected to unblock working capital. These changes will foster business confidence and boost India’s export trade and related economic activities within SEZs.

In a significant development, India’s Goods and Services Tax (GST) Council has issued recommendations aimed at streamlining the process of GST refunds for exporters. These recommendations provide much-needed clarity on the classification of remittances received in Special Rupee Vostro Accounts (SRVAs), offering relief to exporters whose refunds were delayed due to disputes regarding this particular aspect.

• SRVAs, where foreign entities hold funds in Indian rupees, have gained prominence, especially in trade agreements like the rupee-ruble trade between India and Russia. When Indian importers need to make payments to foreign traders in rupees, these amounts are credited to SRVAs. Conversely, when Indian exporters need to receive payments for their goods or services, the SRVA is debited, and the funds are credited to the exporter’s account. Currently, SRVAs are allowed with 22 countries.
• Furthermore, exporters can now claim IGST refunds on supplies to Special Economic Zone (SEZ) units. These moves are expected to unblock working capital for businesses engaged in international trade.