GST Refunds for Telangana Exporters: IT Services, Pharma and SEZ Suppliers

Telangana is one of India's biggest exporters of IT and IT-enabled services, and a major exporter of pharmaceuticals. Hyderabad also has many Special Economic Zones. For these businesses, GST refunds are a significant part of working capital. This guide covers the practical side.

IT and Services Exporters

Hyderabad's software, IT-enabled services and global capability centres typically export under an LUT, without charging IGST, and build up input tax credit on rent, software, equipment and services. Refund claims for this credit are filed periodically in RFD-01. Key points:

• File the LUT at the start of every financial year.
• Keep FIRCs or bank advices matching each export invoice.
• Check the export conditions, especially for subsidiaries of foreign groups and where services might be treated as intermediary services.
• Claim regularly, so no period approaches the two-year limit.

Pharma Exporters

Telangana's pharma exporters ship goods, often with IGST paid and refunded automatically through the customs system when shipping bills and GST returns match, or under LUT with refunds of credit. Common issues include mismatches between invoice values in shipping bills and GST returns, and errors in the shipping bill details that hold up automatic refunds.

Suppliers to SEZs

Supplies to SEZ units and developers are zero-rated. Hyderabad's many IT and pharma SEZs mean local businesses often supply them — services, construction, equipment. These suppliers can supply under LUT and claim refunds, or pay IGST and claim a refund, with the SEZ's endorsement of the supply where required.

Who Processes the Refund

Refund applications are filed on the common portal and processed by the jurisdictional officer — from the Telangana Commercial Taxes Department or central GST, depending on who administers the taxpayer.

A Checklist

1. File the LUT every April.
2. Match export documents to invoices and returns.
3. Check export conditions for intra-group services.
4. Claim refunds monthly or quarterly.
5. Respond quickly to deficiency memos.

Getting Help

Think Filing manages LUTs and refunds for Telangana's IT exporters, pharma exporters and SEZ suppliers.