The GST Council has recommended new measures to reduce the tax burden on Indian exporters. The changes include refunds on GST paid for plant and machinery, wider tax credit recovery and simpler export rules.

Under the proposed changes, exporters will be able to claim refunds of eligible GST paid on plant and machinery. The refunds will be spread over five years. Exporters claiming duty drawback will also be eligible for GST refunds, while an existing cap linked to domestic product prices will be removed.

The Council has also proposed a faster refund process. Applications will be acknowledged within 10 days, and 90% of the refund amount will be released automatically after risk-based checks. The remaining amount will be paid after regular verification.

Four key export rules will also be simplified. Indian companies serving overseas customers through their foreign branches will be able to qualify for export benefits, subject to other applicable conditions.

In addition, services such as repair, testing, certification and processing performed in India on goods owned by foreign customers can qualify as exports. This will apply even when the goods remain in India.

The Council has also clarified the treatment of goods sold to foreign buyers but delivered to Special Economic Zones (SEZs) for storage or processing. Such transactions can qualify for export benefits, provided the prescribed payment conditions are met.

Finally, the rules for determining when export payments are received will be aligned with the Reserve Bank of India’s framework. This will give businesses a clearer and more consistent standard for compliance.

These recommendations aim to improve exporters’ cash flow, reduce tax-related working capital pressures and simplify compliance. Once implemented, the changes could strengthen India’s export competitiveness and support businesses across manufacturing and services.