GST Details

Refund of IGST paid on export of goods and refund of Input Tax Credit

By Adv Mayur Desai

Refund of IGST paid on export of goods:

Rule 96 of the CGST Rules 2017 deals with refund of Integrated Tax paid on goods exported out of India. It provides that the shipping bill filed by an exporter shall he deemed to be an application for refund of integrated tax paid on the goods exported out of India once export general manifest (EGM) and valid return in Form GSTR- 3B has been filed.

Once these conditions are met. the Customs System shall process the claim for refund and an amount equal to the integrated tax paid in respect of each shipping bill or bill of export shall he electronically credited to the bank account of the applicant mentioned in his registration particulars and as intimated to the Customs authorities.

(1) Export General Manifest (EGM)

Filing of correct EGM is a must for treating shipping bill or bill of export as a refund claim. Exporters are advise that they should follow up with their carriers to ensure that correct EGM/export reports are filed in a timely manner.

(2) Details of export supplies in Table 6A of GSTR-1

The details of zero rated supplies declared in Table 6A of return in Form GSTR-1 are matched electronically with the corresponding details available in Customs Systems as per details provided in shipping bills/ bill of export. Thus exporters must file their GSTR-1 very carefully to ensure that all relevant details match. For their convenience, the details available in the Customs System have been made available for viewing in their ICEGATE login.

Exporters who have not filed their GSTR-I for month of July 2017 may be advised to do so immediately.

For month of August 2017 and subsequent months. facility of filing GSTR- I has not been made available by GSTN at present. In order to facilitate processing of refunds, GSTN is making available a separate utility for filing details in Table 6A of GSTR-1 on the GSTN Web portal. Exporters may be advised to submit the requisite details once GSTN develops the utility.

(3) Valid return in Form GSTR-3B

Filing of valid return in GSTR-3B is another pre- condition for considering shipping bill/ Bill of export as claim for refund. Exporters may be advised that they must file these returns expeditiously without waiting for the last date. to ensure that their refund is processed in a timely manner.

(4) Bank account details

As per Rule 96 of CGST Rules 2017, the refund is to be credited in the bank account of the applicant mentioned in his registration particulars. As a practice, exporters have been declaring details of bank account to Customs for the purpose of drawback etc. There is a possibility that bank account details available with Customs do not match with those declared in the GST registration form. In order to ensure smooth processing and payment of refund of IGST paid on exported goods, it has been decided that said refund amount shall be credited to the bank account of the exporter registered with Customs even if it is different from the bank account of the applicant mentioned in his registration particulars. However, exporters may be advised to either change the bank account declared to Customs to align it with their GST registration particulars or add the account declared with Customs in their GST registration details.

(B) Refund of Input Tax Credit: 

As far as refund of the unutilized input tax credit on inputs or input services used in making exports is concerned, exporters shall file an application in FORM GST RFD-01A on the common portal where the amount claimed as refund shall get debited from the electronic credit ledger of the exporter to the extent of the claim.

Thereafter, a proof of debit (ARN- Acknowledgement Receipt Number) shall be generated on the GSTN portal, which is to be mentioned on the print out of the FORM GST RFD-01A and to be submitted manually to the jurisdictional officer. The exporters may ensure that all the necessary documentary evidences are submitted along with the Form GST RFD-01A for timely sanction of refund.

Exporters are therefore advised to immediately file:

(a) Table 6A and GSTR 3B, if not already done, for processing of IGST refund

(b) RFD 01A on GSTN portal for refund of the unutilized input tax credit on inputs or input services used in making exports and

(c) GSTR 1 for August 2017 for amending details provided in July GSTR1, wherever required.

Note:- If any query relates to Direct and Indirect Tax feel free to mail us on mayur@pmlegal.in or info@pmlegal.in