Section 15 of IGST explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 15 of the IGST Act, 2017 allows the integrated tax paid by an international tourist on goods that are supplied to them in India and which they carry out of India when leaving, to be refunded in the manner and subject to conditions to be prescribed. This is India's enabling provision for a Tourist Refund Scheme; the refund mechanism, however, has not yet been operationalised and the procedural rules are pending notification, so no such refund is currently paid at Indian airports.
What Section 15 Says — In Plain English
The section provides that the integrated tax paid by a tourist leaving India on any supply of goods taken out of India by them shall be refunded in such manner and subject to such conditions and safeguards as may be prescribed. It contains an Explanation defining a "tourist" as a person not normally resident in India who enters India for a stay of not more than six months for legitimate non-immigrant purposes. In plain terms, the idea is that a foreign visitor who buys goods in India and takes them home should not bear Indian consumption tax, because the goods are ultimately used abroad.
The intent mirrors the "Tax Free Shopping" or VAT/GST refund schemes common in many countries, where foreign visitors reclaim the consumption tax on goods they buy and export in their personal baggage. The rationale is destination-based taxation: goods consumed outside India should not carry Indian tax. Because the section says the refund will be given "as may be prescribed", it is only an enabling shell — the actual entitlement depends on rules that have not yet been issued.
It is worth stressing what "supply of goods to a tourist" means here. The tourist buys the goods from a domestic supplier within India and pays the ordinary GST embedded in the price. The refund contemplated is of the integrated tax element paid on those goods when the tourist takes them out of the country — turning what was a domestic taxable sale into an effectively tax-free export in the tourist's hands. This is conceptually distinct from the exporter-side zero-rating of Section 16: there, the registered supplier claims the relief; here, it is the departing foreign visitor who would claim it at the exit point. Countries that run such schemes typically do so to encourage inbound tourism and high-value retail spending, and they build in anti-abuse safeguards — minimum spend thresholds, approved retailers, invoice matching and physical inspection of the goods at the airport — precisely the kind of detail India's Section 15 leaves to be prescribed.
Clause / Sub-section Breakdown
- Refund right: The IGST paid by a departing tourist on goods carried out of India shall be refunded.
- Conditional / prescribed: The refund is available only "in such manner and subject to such conditions and safeguards as may be prescribed" — pending notification.
- Explanation — definition of tourist: A person not normally resident in India, entering India for a stay of not more than six months for legitimate non-immigrant purposes.
Applicability & Scope
The provision would apply where: (1) the buyer is a tourist as defined — a non-resident staying up to six months for non-immigrant purposes; (2) the buyer purchases goods within India and pays IGST (or the tax component) on them; and (3) the buyer carries those goods out of India in their personal baggage when leaving. It is confined to goods physically exported in baggage; services consumed within India are outside its scope. Because the operational rules, notified retailers, refund counters and verification process have not been prescribed, the scheme is not currently available in practice.
Two boundary points are worth noting on scope. First, the six-month, non-immigrant test means the scheme is aimed at genuine visitors, not persons who effectively reside or work in India for extended periods; a foreign national on a long work assignment would not be a "tourist" for this purpose. Second, the requirement that the goods be carried out in personal baggage rules out goods that are consumed, installed or left behind in India, as well as goods dispatched separately as cargo unless the prescribed rules were to permit it. Until the enabling rules are notified, none of these boundaries actually bite, because there is no live entitlement to test them against — but they signal the contours the eventual scheme is expected to take.
Worked Examples
Example 1 — Handicraft purchase. A tourist from Germany, staying in India for three weeks, buys a handicraft item for ₹50,000 inclusive of ₹8,475 tax (at 18% on the taxable value). When leaving India through the airport, if the Tourist Refund Scheme under Section 15 were operational, the tourist would present the goods and the tax invoice at a designated refund counter and, after verification, receive a refund of the eligible tax (subject to any handling deduction).
Example 2 — Ineligible service. The same tourist also pays ₹20,000 (₹3,050 tax at 18%) for a guided tour and hotel stay. Even once the scheme is live, that ₹3,050 is not refundable, because the tour and stay are services consumed within India, not goods carried out in baggage.
| Particular | Amount (₹) |
|---|---|
| Value of goods (inclusive) | 50,000 |
| Tax component at 18% | 8,475 |
| Refund on export in baggage (when scheme is live) | Up to 8,475 (less any handling charge) |
| Tax on services consumed in India | Not refundable |
Step-by-Step in Practice (as designed, once notified)
- Tourist buys goods from an approved retailer and obtains a valid tax invoice.
- Tourist retains the goods for export in personal baggage.
- At the departure airport, the tourist presents the goods and invoice at a designated refund counter.
- Authorities verify export and the tourist's eligibility.
- The eligible tax is refunded, less any prescribed handling charge.
Common Mistakes & Practical Notes
- Believing a refund is claimable today — Section 15 is enabling only; the mechanism is not yet notified, so no refund is currently paid.
- Assuming services qualify — only goods carried out of India in baggage are covered.
- Overlooking the six-month / non-immigrant condition in the definition of "tourist".
- Expecting a full refund — global schemes typically involve minimum purchase thresholds, approved retailers and a handling deduction.
- Confusing this with export refunds under Section 16 — that route is for exporters, not departing tourists.
Related Sections
Section 16 of the IGST Act (zero-rated supply and export refunds), Section 54 of the CGST Act (refund of tax), Section 2 of the IGST Act (definitions), and the customs baggage rules governing goods carried out of India.
Recent Amendments & Context
Section 15 has not been substantively amended and, more notably, has never been fully operationalised. The provision has remained a dormant enabling clause since 1 July 2017 because the Government has not notified the manner, conditions, safeguards, approved retailers or airport refund infrastructure it requires. Periodic policy discussions have floated activating a tourist refund scheme to boost inbound tourism and shopping — mirroring successful models abroad — but as of now no rules have been issued and tourists cannot reclaim GST on departure. Any future activation would come through notified rules under this section rather than an amendment to the section itself.
For practitioners and retailers, the practical takeaway today is simple: do not promise foreign customers a GST refund on departure, and do not build a "tax-free shopping" claim into marketing, because there is no operative mechanism to honour it. If and when the scheme is switched on, expect it to arrive as a package — a notification prescribing eligible categories of goods, a system of approved or registered sellers issuing scheme-compliant invoices, dedicated refund counters or a digital validation app at international airports, a minimum purchase threshold, and a handling or processing deduction from the gross tax. Retailers in tourist-heavy locations would then need to enrol, capture passport and departure details at the point of sale, and reconcile refunds. Until that framework exists, Section 15 functions purely as a placeholder in the statute book — a clear signal of legislative intent to relieve exported consumption, waiting on the executive to breathe life into it through rules. In the meantime, the only tax relief actually available on outbound movement of goods flows through the export and SEZ routes in Section 16, which are aimed at registered suppliers rather than individual visitors.