The Process of GST Refund on Export: As per the provisions included under IGST law, the exports of goods are considered as zero rated supply is exempted from GST and are eligible to claim the refund of GST paid. The GST portal has been set up for making GST refund claims efficiently. In this article, we look at the procedure for claiming GST refund on exports.
Definition of the GST Act
The IGST Act defines export as the taking out of goods or services from India to a place outside India. As per the Act, goods and services that are exported are considered “zero-rated supplies”. Taxable persons who export such goods and services are also eligible for claiming refunds on the GST paid. Thus, the GST rate is 0% for exports.
Procedure to Avail GST Refund
Integrated GST is applicable on inter-state supplies of goods and services, as well as on imports and exports of India. However, the exporter can claim a refund on the IGST charged, and this can be done using one of the two available options:
i. Exporting goods and services under a Letter of Undertaking or bond without paying the IGST
Under this exporter is allowed to export goods without payment of tax under the Letter of Undertaking (LUT) or a bond. In such case, any ITC accumulated on inputs/input services unutilised will be available for refund. The LUT can be filed in Form GST RFD-11 on the common portal by accessing
Services ⇒ User Services ⇒ Furnish Letter of Undertaking (LUT). The necessary details are filled and uploaded along with the digital signature.
ii. Exporting goods and services on payment of the IGST
Exporters can claim the refund of IGST paid at the time of export. The GST refund process for exports in case of goods begins with a primary document known as shipping bill. The shipping bill and other export-related documents should be filed on the Indian Customs Electronic Commerce Gateway (ICEGATE).
GST refund process for exports continues on the GST portal in form GSTR-1. These details are declared in GSTR-1 under Table ‘6A – Exports Invoices’. The details required in this table are as follows:
- Invoice date
- Port code
- Shipping bill no./bill of export no.
- Shipping bill date/bill of export date
- Total invoice value and taxable value
- GST payment (With Payment of Tax needs to be selected)
- Whether the supply is eligible for tax at a differential percentage, as notified by the government
- The tax amount which is auto-populated but can be edited
All the details declared in this table should match with the corresponding details declared in the shipping bill. In case invoices not transmitted to ICEGATE due to mismatch of above details, then you can make necessary changes in Table 9A of GSTR-1(Amended Export Invoices). Also, If all data of Export Invoices from GST portal got transmitted to ICEGATE without any error & still refund not credited in your bank account then you can login to ICEGATE portal for further action.
Further, GST refund process for exports will involve declaration in GSTR 3B too. The relevant amounts need to be filled up in Table 3.1(b)- ‘Outward taxable supplies (zero-rated)’. The IGST amount entered here should be either equal to or greater than the total IGST filled in Table 6A of the corresponding GSTR-1.
Form GST RFD-01/RFD-01A
GST refund process for exports will need the filing of a form RFD01 or RFD-01A in particular cases only.
i. Export of Goods: In case of export of goods with payment of tax, there is no separate refund application required as the shipping bill itself will be treated as the refund application. The details entered in Form GSTR-1 will be matched with the details mentioned in the shipping bill as filed with ICEGATE. The ICEGATE will then process the refund and credit the same to the bank account as mentioned by the taxpayer on its portal.
ii. Export of Services: A separate refund application in RFD01A is required. Such taxpayer needs to login to the GST portal and selecting Services ⇒ Refunds ⇒ Application for Refund ⇒ Export of Services with payment of tax RFD-01A. The details relating to the export of services will need to be uploaded using the offline utility. The amount of refund and the bank account number in which the refund is to be credited will also need to be provided. On successful filing, an Application Reference Number (ARN) will be generated, which can be used to track the status of the refund application.
The entire refund process on account of the export is completed by the ICEGATE (Indian Customs Electronic Commerce/Electronic Data Interchange (EC/EDI) Gateway). Hence for more query taxpayer needs to contact corresponding ICEGATE Jurisdictional officials.
TIME LIMIT for Refund Process
The entire process of refunding tax paid on exports of goods can be completed in seven days from the date of application submitted.
In this article, we have covered the GST refund process in detail to make your life easy. By following this documentation and procedure, a goods or services exporter can comply with the requirements of GST law and also stay on course to receive the refund on IGST. Under the proposed GST regime technology can play a vital role in determining refund expeditiously. The process outlined in the draft paper has taken care of almost all the issues which were causing delay in the existing process.
Although the GST system turned out frustrating for exporters during the first year, the government promises improvements. Throughout the implementation of the GST system, the GST Council has been listening to industry concerns and making changes. They’re still working on simplifying the GST return and refund process and addressing problems with regards to the GST system. As those changes happen, we as the Cost & Management Accountants Of India have a GREAT OPPORTUNITY to advise and educate our clients as a part of making a contribution to their profitability year after year.