Ever stood in line at an Indian airport shop and wondered, "Do I really have to pay this GST if I’m not from here?" You’re not alone. India’s Goods and Services Tax—better known as GST—tends to trip up plenty of international visitors and overseas businesses.
Here’s the deal: GST is built into almost everything you buy in India, from a hotel room in Mumbai to a fancy saree from Delhi. If you’re a foreign tourist, you can’t avoid it at the cash counter. There’s no exception just because your passport comes from a different country. See something on a menu or price tag? That final bill usually sneaks in GST before you can grab your credit card.
Looking at it from the business side? Things get even trickier. Foreign companies offering goods or digital services to Indian customers often need to worry about GST registration—even if they don’t have an office or staff in India. Miss this step, and you risk fines or your entire service being blocked by Indian authorities. Not fun.
If you’re hoping to claim a refund on that GST as a tourist, bring a strong dose of patience: India technically allows refunds for international tourists on certain goods, but the process rarely works in practice. Most people just pay and move on. But with a few smart moves, you might be able to minimize surprises and keep your India trip—business or pleasure—running smooth.
- Who the GST Law Applies To
- GST for Foreign Tourists: What to Expect
- Foreign Businesses and GST Registration
- Tips to Navigate Indian GST as a Foreigner
Who the GST Law Applies To
Here’s the truth: GST covers almost everyone who buys or sells things or services in India. That means it doesn’t matter if you’re a lifelong Delhi resident or just landed from Paris for a quick vacation—when you buy something in India, you pay GST. This central indirect tax was launched back in July 2017. Since then, it’s been plugged into the price of most goods and services all over the country—restaurants, shopping malls, even online marketplaces like Amazon India or Flipkart build it right in.
The GST rules break down into these categories:
- Indian citizens and residents: Pay GST on nearly all goods and services, unless specifically exempted (like unbranded groceries or basic healthcare).
- Foreign tourists:
- Buy a souvenir or eat out in India? You pay GST as part of the price, just like locals. No special tourist discount or exemption on that bill.
- Foreign companies:
- Offer services or products to Indian citizens (even online)? GST law applies, and you might need to register and collect the tax from Indian customers.
If you’re a business—Indian or foreign—earning over ₹40 lakhs (around $5,000 USD) in a year from taxable sales in India, registration is mandatory. For service businesses, the entry bar is ₹20 lakhs. And for foreign e-commerce or digital service providers (say, Netflix or international SaaS platforms), GST registration is needed from rupee one—there’s no basic exemption there.
Let’s clear up some numbers. Here’s a quick table showing who gets hit by GST and when:
| Who | GST Applies? | Registration Needed? |
|---|---|---|
| Local buyer (citizen/resident) | Yes, at point of purchase | No (only for businesses above threshold) |
| Foreign tourist (shopping in India) | Yes, at point of purchase | No |
| Foreign company (digital/service sales to Indians) | Yes | Yes (from first rupee) |
| Indian business/exporter selling abroad | No (exports are zero-rated) | Yes (business requirements apply) |
The core idea is simple: GST is baked into almost every transaction on Indian soil. Exemptions are rare and usually cover essentials (unprocessed food, public transport, or certain medicines).
GST for Foreign Tourists: What to Expect
So you’re coming to India on vacation or for a short trip and wondering if you get special treatment on GST—sorry, but you’re basically in the same boat as locals when it comes to most purchases. GST gets slapped on everything from your hotel to that handmade souvenir you just have to have. There’s no special “tourist discount” at checkout.
Here’s where it gets interesting: Back in 2017, India announced the Tourist Refund Scheme (TRS). It was supposed to give international tourists a break by letting them claim GST refunds on goods taken out of the country, as long as they showed proper proof at the airport. Sounds good on paper, right? In reality, even in 2025, the system is not actually live. No working counters at airports. No clear process for tourists. So, for now, refunds aren’t really possible, despite what old brochures say.
If you’re still curious or just want the facts straight, here’s how GST works for foreign tourists in India right now:
- You pay GST directly on goods and services—hotels, restaurants, shopping, tours—the same as Indian nationals.
- No automatic GST exemption or upfront discount for foreigners.
- Refunds of GST are not currently available at airports or on departure.
- Some big-ticket goods (like electronics or jewelry) might look attractive because of a possible refund, but in practice, you will pay the full price including GST.
Curious about how much GST you might be paying at different places? Here’s a quick look at typical GST rates for common tourist expenses:
| Type of Purchase | GST Rate |
|---|---|
| Hotel Room (up to ₹7,500/night) | 12% |
| Hotel Room (above ₹7,500/night) | 18% |
| Restaurant Bill | 5% or 18% (depends on restaurant type) |
| Taxi App (like Ola/Uber) | 5% |
| Shopping (general goods) | 5%–28% |
Quick tip: Always check if the GST amount is included in the sticker price or added at the counter. Some smaller shops might ask for cash and “forget” to provide a GST invoice, which means no refund and sometimes fake prices. Stick to places that give you a proper bill showing GST.
Foreign Businesses and GST Registration
If you’re a foreign company selling goods or services to Indian customers, GST isn’t just buzz—it's a legal must. Even if you operate from outside India and don’t have an office or staff here, you're still on the hook if you supply goods or certain services into the country. The rules can be confusing, so let’s clear them up.
Here's when you really need to pay attention:
- If you’re an overseas supplier providing GST-taxable goods to any Indian address.
- If you’re selling digital services (like streaming, cloud apps, or e-learning) to anyone in India, even if it’s just one customer.
India calls these businesses "non-resident taxable persons" (NRTPs). You need a GST registration before you start invoicing clients. That means filling out an online application, giving details about your business, a local tax representative (also known as an authorized signatory), and any paperwork proving your international business identity.
Don’t expect a permanent GST registration. For non-resident businesses, it’s usually only valid for 90 days, but you can ask for extra time if needed. You’ll also need to pay an advance GST deposit based on the expected value of your sales. Indian law expects you to file regular GST returns for as long as your registration lasts—mess this up, and penalties stack up fast.
If you’re supplying services to businesses registered in India, something called the "reverse charge" mechanism might apply. That means your Indian client is the one required to pay the GST and not you directly. Make sure you clarify with your client to avoid double tax or payment hiccups.
Bottom line: If you’re a foreign company looking to tap into the Indian market, double-check when GST registration becomes mandatory for your business model. The headache of sorting it upfront keeps you in good books with Indian tax authorities and ensures smoother business operations in the long run.
Tips to Navigate Indian GST as a Foreigner
Dealing with India's GST as a foreigner? It's not as simple as swiping your card and walking away. Here’s what you need to know to keep things easy and avoid trouble.
- Always check your receipts: Make sure GST is added correctly. It should appear as a separate line on bills at hotels, restaurants, and stores. Sometimes sellers conveniently leave it out and pocket the difference. Stay sharp and ask for a proper tax invoice — this is your proof of payment.
- Understand refund reality: On paper, India allows GST refunds to tourists for goods they take out of the country. In practice, this rarely works. There’s no official, working refund desk at most airports yet. Save your receipts just in case, but don’t count on money back at departure.
- Online shopping bites: If you buy stuff online from Indian sites and have it shipped within India, GST still applies—no foreigner exemption. But if you import it for delivery outside India, Indian GST won’t kick in, though you might get hit by your own country’s import taxes.
- Foreign business? Register or subcontract: If you’re a business providing digital services (think SaaS or streaming) to Indian users, Indian GST law requires you to register under a simplified scheme. Partnering with a local Indian firm to handle billing can save you hassle, but the tax is still due.
- Use credit cards for a paper trail: Cash is king in India, but cards create a record. This helps in rare cases where authorities ask for proof, especially with large purchases or business deals.
Just to put some numbers to it, here’s what you typically pay in GST as of May 2025:
| Type of Good/Service | Usual GST Rate |
|---|---|
| Hotels above ₹7,500/night | 18% |
| Restaurants (AC, non-AC) | 5%–18% |
| Luxury items (jewelry, electronics) | 18%–28% |
| Domestic flights | 5% |
| Basic groceries | 0% |
As tax lawyer Smita Garg puts it:
“Foreigners should always double-check tax invoices and keep purchase records. Indian GST enforcement can surprise you, especially with big-ticket buys or business services.”
One last thing—don’t get caught up in store offers claiming to skip GST for tourists. It’s not legal, and you could get dragged into a messy situation if authorities catch wind. Play by the rules, stash your receipts, and you’ll save yourself more headaches than rupees in the end.
