Before discussing on Refund Procedure for Export under Goods and Service Tax, we will know some basics. With the implementation of Goods and Services Tax (GST) in India from 1st of July 2017, Indian authorities have revised procedures relating to the export of goods and services from India. Amendments have been made in various Rules and Regulations relating refund procedure for exports and imports, in order to align them with the new provisions of GST law.
As per the Revenue Department as on 30th December 2019, Rs. 1.12 lakh Crore have been refunded to Exporter. Only Rs. 3.60 Crore is pending with the custom Department.The Central Board of Indirect Taxes and Custom (CBIC) said that special focus has been given to the process of quick disbursal of GST Refund to Exporter.
Circular No. 26/2017-Cus, dated 1-7-2017 has been issued in this regard by the CBEC to explain certain changes in the export procedures, particularly with respect to claiming refund of taxes or duties paid on export goods or inputs used in export goods. Under Goods and Services Tax (GST) export has been defined as Zero-rated supply. Now let’s understand the concept of Zero-rated in broad and refund procedure for export under GST.
Export Zero rated supply
Exports in the new regime have been categorized as “zero-rated supply”, and hence duties or taxes paid either on inputs/input services or on final products, are to be refunded. The new regime hence provides for two options for making exports – Export under bond followed by a refund of Input Tax Credit (ITC), or payment of Integrated Goods and Services Tax (IGST) and then refund of same.
Now Export under Goods and Services Tax (GST) can be made in two-way:
1. Export can be made with Bond
Under the recently implemented GST regulation, an export invoice has to mention either “Supply meant for Export on Payment of IGST” or “Supply meant for Export under bond without payment of IGST” meaning thereby that export cannot be done without following any of the two ways of raising export invoice. Central Goods and Services Tax Rules, 2017 have been amended to incorporate new Rule 96A providing for refund of integrated tax (IGST) paid on export of goods or services under bond or Letter of Undertaking.
Any registered person availing this option has to furnish, prior to export, a bond or a Letter of Undertaking in FORM GST RFD-11, while details of the export invoices contained in FORM GSTR-1 furnished on the common portal by the exporter would be electronically transmitted to Customs and a confirmation of export from them would be electronically transmitted to the GST common portal. It may be noted that these provisions will also be applicable when goods or services are supplied to a unit or developer in Special Economic Zone (SEZ).
2. Export can be made with payment of Integrated Tax.
The exporter may supply goods or services or both, subject to such conditions, safeguards and procedure as may be prescribed, on payment of integrated tax and claim refund of such tax paid on goods or services or both supplied. Any registered person would not be required to file any application for refund of Integrated Goods and Services Tax (IGST) paid on supply of goods for exports.
The Shipping Bill, having GST invoice details would be deemed to be an application for refund of integrated tax paid on the goods exported out of India. Such application would be deemed to have been filed when the person in charge of the conveyance carrying the export goods files an export manifest or an export report covering the number and the date of shipping bills.
Currently, the facility of automatic refund is available only for those exporters who have paid Integrated Goods and Services Tax (IGST) while exporting goods. Since the GST Network (GSTN) systems are integrated with Customs, hence, refunds are generally transferred to the bank accounts of such exporters within a fortnight.
There are some conditions laid down for successful claiming of refund of IGST paid on exports:
GSTR-3B for the month is filed
Table 6A of GSTR-1 has been filed
Details of Shipping Bill and Invoice provided in Table 6A of GSTR-1 should match
The IGST amount mentioned in GSTR-3B is equal or more than the IGST mentioned in Table 6A of GSTR1
As per the Act, 90% of refund application is processed on a provisional basis within 7 days of submission of application for refund.
Now, I am going to guide you through portal live how to file and get a refund of IGST paid on export:
1.First you have to go to GST portal home page and click on login. Provide your login credential there and enter the GST common portal:
2.After login you will land on the home screen. Now click on Return Dashboard:
3.After that select month from the dropdown listand click on search:
4.Now, you will find many tabs there. Click on “Prepare Online” under GSTR1 tab :
5.You are now inside GSTR1, now among many tabs, you will see tab “6A-Export Invoices”. Click on that to fill your export details:
6.After that, you will find the sheet where you have to fill your all Export Invoices one by one. Click on “ADD DETAILS” tab to fill the details:
Now after that, you have to file GSTR-3B properly for the period matching with the details provide in the GSTR-1.
Certain points should be kept in mind while filing GSTR1 and GSTR-3B for claim of IGST paid on export:
>IGST amount, to be paid on export of goods/services outside India or to SEZ, are filled under table 3.1 (b) and not under table 3.1(a) or 3.1(c) (The same will be shown in B2B in GSTR-1
>IGST amount filled in table 3.1(b) of GSTR 3B is either equal to, or greater than the total IGST shown to have been paid under Table 6A (exports), and Table 6B(SEZ) of GSTR 1
Provide the correct Bill number of the export in GSTR-1
Provide the correct Date on which the bill was issued in GSTR-1
Provide the correct Port Code of Port of export in GSTR-1
Provide the correct Shipping Bill No./ Bill of Export No. in GSTR-1
Provide the correct Total Invoice Value in GSTR-1
NONE of the export invoices shall be processed for transmission to ICEGATE if correct IGST amount is not mentioned and paid through table 3.1(b) of GSTR 3B
So this was the complete procedure for claiming IGST paid on export of goods or services. Hope this article will be helpful. For more queries and questions do comment to me….