2025Speed Up GST Input Claims in India

1. Introduction

• Foreign companies, including Japanese enterprises, are increasingly setting up business in India to tap into its fast-growing consumer market and export potential. One key financial aspect that directly impacts their operations is the recovery of GST input credit. For export-oriented units, delays in GST refunds can severely strain working capital, affecting procurement, payroll, and overall cash flow.
• Japan is among India’s top trading partners, with over 1,400 Japanese companies operating across manufacturing, services, and trading sectors. Many of these companies regularly export goods or services and rely on timely GST input credit refunds to maintain liquidity. Even though the Indian GST system promises automated refund processing, in reality, businesses often face compliance hurdles, document mismatches, or delays in jurisdictional approvals.
• This makes it essential to work with experts who understand both Japanese corporate practices and Indian tax frameworks. KNM bridges this gap by offering end-to-end support in GST compliance, accurate documentation, and timely follow-up with tax authorities. From reconciling GSTR-2B mismatches to ensuring correct export documentation under LUT or rebate schemes, KNM accelerates refund timelines and reduces financial stress.

2. Can a Foreigner Start a Business in India?

Yes, a foreigner can start a business in India—provided they comply with the Foreign Exchange Management Act (FEMA) and Foreign Direct Investment (FDI) policy. India allows 100% FDI in many sectors under the automatic route, meaning prior government approval is not needed. This makes India an attractive destination for entrepreneurs from the US, Japan, the GCC, and Europe.

Foreign investors typically choose from three main entry routes: 

For trading and export-oriented businesses, GST registration is mandatory, regardless of turnover. It ensures legal invoicing, input tax credits, and smooth movement of goods across states.

Once GST-registered, businesses can claim Input Tax Credit (ITC), reducing the tax burden on purchases used for further business. This improves cash flow and price competitiveness, especially in export-heavy sectors.

Setting up a business in India involves understanding compliance from day one. KNM ensures foreign founders select the right route, obtain GST, and stay compliant with Indian tax laws.

3. Fast-Track GST Input Credit Process for Exporters

Exporters operating in India—whether Indian residents or foreign-owned entities—can benefit significantly from the fast-track GST input credit and refund process. This is especially important for foreign entrepreneurs exploring the Indian market, as export activities are zero-rated under GST.

Who is Eligible?

• Businesses exporting goods or services without payment of IGST under a valid Letter of Undertaking (LUT) 
• Exporters opting to pay IGST on exports and claim a refund

Refund Timelines

• Under Rule 96, exporters claiming refunds of IGST on goods get automatic processing through ICEGATE (Customs). Refunds are usually credited within 7–10 days of GSTR-1 and GSTR-3B filing. 
• Under Rule 89, for unutilized ITC (Input Tax Credit), refund applications can be filed via Form GST RFD-01. Processing time is generally 30–60 days.

Key Compliance Tips

• File GSTR-1 and GSTR-3B consistently and on time 
• Ensure invoice details match across GST and Customs portals 
• Maintain supporting documents like shipping bills, LUT copies, and FIRC/Bank realization certificates

Example:

A Singapore-based textile trader sets up a Private Limited company in India and starts exporting fabrics. By filing under LUT and maintaining proper GST returns, the company receives input tax refunds without delay, improving working capital.

Timely documentation and expert support can make India’s GST system work in your favor, especially if you’re a foreigner starting a business in India.

4. Document Checklist for GST Refund Claims

Foreign entrepreneurs setting up export-oriented businesses in India often deal with GST on goods and services. While zero-rated exports qualify for a GST refund, the process demands proper documentation. Missing a single record can delay or block your claim.

Yes, a foreigner can start a business in India, but securing timely GST refunds is key to cash flow, especially in the early stages. If you’re exporting from India under a private limited or wholly owned subsidiary, here’s what you need.

Key Documents for GST Refund Claims in India:

1. Export Invoices
   Must include GSTIN, HSN codes, and clearly state “Supply meant for export under bond or LUT.” 
2. Shipping Bills
   Filed through Indian Customs. Essential for tracking the outbound movement of goods. 
3. FIRC/BRC
   Foreign Inward Remittance Certificate or Bank Realisation Certificate—proof that export payments were received in foreign currency. 
4. LUT Certificate (Letter of Undertaking)
   Mandatory if you’re exporting without payment of IGST. 
5. Reconciliation Sheet
   A detailed comparison of outward supplies in GSTR-1 vs. the books of account, proving your claims are consistent.

Working with experienced advisors like KNM helps avoid document mismatches, especially for foreign promoters unfamiliar with Indian filing norms. A clear paper trail ensures faster refunds and stronger working capital.

5. GST Portal Navigation Tips

Navigating India’s GST portal can be challenging, especially for foreign entrepreneurs new to the compliance landscape. While a foreigner can start a business in India through structures like a Private Limited Company or Liaison Office, understanding GST processes like refunds is critical to avoid cash flow issues.

Here’s a step-by-step breakdown to help you file GST refund applications smoothly using Form RFD-01:

GST Refund Filing: Key Steps

• Login to www.gst.gov.in using your credentials. 
• Go to Services > Refunds > Application for Refund. 
• Select the relevant refund type (export, excess balance, etc.). 
• Upload supporting documents like invoices, shipping bills, or bank realization certificates. 
• Submit with digital signature (DSC) or EVC.

Tracking Refund Status

• Navigate to Services > Refunds > Track Application Status. 
• Enter ARN (Application Reference Number) to check real-time updates.

Common Errors and Fixes

• Error: “Invalid DSC” – Ensure DSC drivers are updated. 
• “Session expired” – Refresh browser or clear cookies.

Case Example

A UAE-based exporter working with KNM faced repeated refund rejections. The issue? Uploading ZIP files instead of PDFs. Once corrected, the ₹8.5 lakh refund was approved in under 14 days.

With KNM’s guidance, foreign businesses can avoid these costly delays and stay compliant from day one.

6. KNM’s Support for Japanese Exporters in India

Japan is one of India’s key trading partners, and Japanese companies exporting goods or services to India often face complex indirect tax challenges, especially under India’s Goods and Services Tax (GST) regime. While the process of GST registration and refund claims is digitized, practical hurdles often delay approvals. This is where KNM offers hands-on support.

Foreigners can start a business in India, including setting up wholly owned subsidiaries or branch offices. But they must comply with Indian tax laws from Day 1. For exporters, getting GST refunds processed on time is critical for working capital efficiency.

KNM’s Support for Japanese Exporters in India:

• GST Setup & Filings
  Assistance in obtaining GST registration across states and ensuring monthly and annual returns are error-free
• Refund Documentation
  Preparation and submission of refund claims for exports under LUT (Letter of Undertaking) without payment of tax.
• Liaison with GST Officers
  Representation during assessments or if refund applications are held up due to clarifications or scrutiny. 
• Case Example
  A Japanese auto-parts exporter faced a 9-month delay in ₹1.2 crore IGST refunds. KNM intervened, clarified documentation issues, and secured refund approval within 3 weeks.

7. Conclusion

Foreign businesses entering India often face confusion around tax compliance, especially when it comes to GST refunds. For export-driven firms from Japan, this refund isn’t just a formality—it directly impacts working capital and business sustainability.

Yes, a foreigner can start a business in India. The government permits 100% FDI in most sectors under the automatic route. Once a business is incorporated—typically as a Private Limited Company or Liaison Office—it becomes eligible to register under GST and claim input tax credits or refunds on exports.

But here’s the catch:
Exporters must deal with monthly return filings, invoice matching, e-invoicing mandates, and refund applications via the GST portal. One mistake—like a mismatched shipping bill or delayed LUT—can stall refunds for months.

That’s where KNM steps in.

Summary:

• Japanese firms exporting from India are eligible for GST refunds. 
• Filing errors, document mismatches, or wrong classifications cause delays. 
• KNM helps businesses file accurate claims, meet timelines, and track refunds. 
• KNM also offers end-to-end incorporation and GST registration services.

✅ Contact KNM to simplify GST compliance and speed up your refund timelines. Focus on exports—let us handle the tax backend.

Contact KNM India today! 

• email us

           India: services@knmindia.com

           Japan: japandesk@knmindia.com 

• Phone :India: +91 124 4295170, +91- 9910095170
• Japan: +81-3-6869-0850 , +81-3-6821-9455 

website: https://knmindia.com/

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