IGST refunds on Exports - Required Documents and FAQs

IGST refunds on Exports – Required Documents and FAQs

Today we will be talking about IGST refunds on exports as the CBIC (central Board of Indirect Taxes and Customs) has observed that a considerable number of exporters are facing difficulties for the sanction of pending refunds in getting their IGST refunds sanctioned. The date has been extended to 31^st March 2021.

Understanding the IGST Refunds

To understand IGST refunds on export we will first understand the meanings of the terms and phrases that are commonly used in this aspect along with the process of filing of refund. Later in the blog we will be also addressing few a FAQ’s and their answers.

Exports of goods

There is no need for filing a separate refund claim as the shipping bill filed by the exporter is itself treated as a refund claim. As per rule 96 of the CGST Rules, 2017, the shipping bill filed by an exporter shall be deemed to be an application for refund of integrated tax paid on the goods exported out of India and such application shall be deemed to have been filed only when:-

The person in charge of the conveyance carrying the export goods duly files an export manifest or an export report covering the number and the date of shipping bills or bills of export; and
The applicant has furnished a valid return in FORM GSTR-3 or FORM GSTR3B, as the case may be.

Upon receipt of the information regarding the furnishing of a valid return in FORM GSTR-3 or FORM GSTR-3B, as the case may be and FORM GSTR-1 from the common portal, the system designated by the Customs 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 be electronically credited to the bank account of the applicant mentioned in his registration particulars and as intimated to the Customs authorities.

Service Exporters and Persons making supplies to SEZ

Under this category also, the supplier may choose to first pay IGST and then claim refund of the IGST so paid. In these cases, the suppliers will have to file refund claim in FORM GST RFD – 01 on the common portal, as per Rule 89(1) of the CGST Rules, 2017. Service Exporters need to file a statement containing the number and date of invoices and the relevant Bank Realisation Certificates or Foreign Inward Remittance Certificates, as the case may be, along with the refund claim. In so far as refund is on account of supplies made to SEZ, the DTA supplier will have to file the refund claim in such cases. The second proviso to Rule 89(1) stipulates that in respect of supplies to a Special Economic Zone unit or a Special Economic Zone developer, the application for refund shall be filed by the –

Supplier of goods after such goods have been admitted in full in the Special Economic Zone for authorised operations, as endorsed by the specified officer of the Zone;
Supplier of services along with such evidence regarding receipt of services for authorised operations as endorsed by the specified officer of the Zone.

*As per sec 16(1) of IGST Act any supplies made by a registered dealer as an export (Both goods or services) or supply to an SEZ qualifies for Zero Rated Supplies in GST. The supply to a developer of an SEZ is also covered under Zero-Rated Supplies in GST as no tax is levied on these supplies as well.

**A refund once applied has to be paid within 60 days from the date of receipt of complete refund application. Beyond that time frame, an interest of 6% has to be paid to the applicant.

Documents required for claiming IGST refunds

Here are documents required to claim IGST refunds :

IEC (Import Export Code)
Purchase orders relevant to the export transaction
Tax invoices with details such as:-
- Indication if the export is made with or without payment of the integrated tax.
- Exporter’s address, name and GSTIN.
- Number and date of the invoice.
- Recipient’s name and address, along with the destination country and delivery address.
- Harmonized System of Nomenclature (HSN) code of goods, along with their description.
- Size and amount of the shipped goods indicating the number of units.
- The sum of the value of all the goods along with a breakdown of cost per unit.
- Signature of the exporter or an authorised signatory.
- A shipping bill with details matching the tax invoice.

FAQ’ s related to filing of IGST Refunds

Q.1. have filed my GST returns but still my refund is not sanctioned.

Ans. The IGST refund would not be processed if it fails any validation at the level of either GSTN or Customs system. Validation errors occur due to various deficiencies, which are enumerated here-in-after.
(ii) Invoices provided in Table 6A of GSTR 1/1E are incomplete, e.g., details of shipping bill and port number/code are not mentioned.
(iii) IGST paid under Table 3.1(b) of GSTR 3B being less than total IGST claimed in Table 6A of GSTR 1/1E of the same period. The claim cannot be more than that of the amount of IGST paid.

Q.2. What steps are to be taken in cases of errors mentioned above and who should be contacted in such cases?

Ans. Correction of errors need to be done in the GST return filed. Table 9A has been provided to carry out those corrections. If the exporter finds that even after the correct filing of return, their shipping bills do not reflect in Customs system (reflected in ICEGATE login of exporter), they may write to GSTN helpdesk.

Q.3. How can I find whether my refund data has been successfully transmitted by GSTN to Customs or not?

Ans. GSTN is reportedly working on a feedback/message system so as to inform the exporters about such failed validations. At present, the Customs system does not have any information about the reasons for which validation at GSTN has failed. However, for all those records which have been successfully transmitted to Customs system, the report can be generated at the end of field officers. Even the exporter has the option to check the GST validation status for his shipping bills in his ICEGATE website login for all records transmitted by GSTN.

Q.4. I have filed correct information in GST return but still my refund is not sanctioned.

Ans. In cases where the exporter has filed correct information in the GST returns and it gets successfully validated by the GSTN, it is thereafter transmitted electronically to the Customs system wherein the GST return data is matched with the shipping bill data. If the matching is successful, ICES processes the claim for refund and the relevant amount of IGST paid with respect to each shipping bill or bill of export is electronically credited to the exporter’s bank account as registered with the Customs authorities. But, wherever the matching fails on account of some error, the refund do not get sanctioned. The matching between the two data sources is done at invoice level and any mis-match of the laid down parameters results in one or more of the following errors/responses:
SB000 Successfully validated
SB001 Invalid SB details
SB 002 EGM not filed
SB 003 GSTIN mismatch
SB004 Record already received and validated
SB005 Invalid invoice number
SB 006 Gateway EGM not available

Q.5. What if records are not being transmitted from GSTN to Customs system?

Ans. It has been observed that a number of records have not been transmitted by GSTN to the Customs system which could be on account of various errors that have occurred in the validation carried out by the GSTN. It is understood that cases where such validations fail are on account of:
(i) Both GSTR 1/Table 6A and GSTR 3B have not been filed for that supply or there are missing invoices in GSTR 1 for that supply.
(ii) Invoices provided in Table 6A of GSTR 1/1E are incomplete, e.g., details of shipping bill and port number/code are not mentioned.
(iii) IGST paid under Table 3.1(b) of GSTR 3B being less than total IGST claimed in Table 6A of GSTR 1/1E of the same period. The claim cannot be more than that of the amount of IGST paid.

Q.6. In case of errors, where should I contact for necessary action?

Ans. The following steps could be followed in case of errors in processing of refunds:
i) When the records have not been transmitted by GSTN to Customs, exporters may contact GSTN helpdesk.
ii) Wherever the error is SB002/SB006, exporter may approach their shipping line/airline/carrier to file the EGM immediately.
iii) In cases where the temporary scroll is generated but it’s not included in the final scroll, the exporters are advised to furnish correct bank account details to the proper officer (Customs field formation) in order to update the same in ICES.
iv) As the status of refund claims is available in ICEGATE login, in cases where the corrective action has been already taken by the exporter, he may write to ICEGATE/gateway port Customs for redressal.
v) In general, any grievance related to the IGST refund claim may be brought to the notice of the Pr. Commissioner or Commissioner of the Customs of the gateway port for necessary action.

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