All about Export Refunds under GST


Refund refers to any amount that is due to the taxpayer from the administration owing to excess payment of taxes or any other reason. In the current GST regime, the entire refund process has been clearly defined in law. It aims at keeping the issues due to which refund arises at a minimum level with the help of higher compliances and self-regulating mechanism.

Scope of Refund

i.      Refund of taxes paid as per GST tax rates in India on zero-rated supplies
ii.    Refund of taxes on Inputs or Input Services used in making zero-rated supplies
iii.  Refund of taxes on the supply of goods regarded as deemed exports
iv.  Refund of the unutilized input tax credit (ITC) as provided u/s 54(3) i.e. due to inverted duty structure.
Further, there could be various other situations wherein refund can be granted to the registered person as per the refund provisions. Taxpayers who export goods or services can choose any of the following options:
  1. Export under bond/Letter of Undertaking without payment of taxes and claiming refund of ITC or
  2. Pay IGST after setting-off ITC and claim the refund of tax paid.
Though some conditions are 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 as per GST rates India, mentioned in GSTR-3B should be equal or more than the IGST mentioned in Table 6A of GSTR-1.
As per Act, 90% of refund is processed on a provisional basis within 7 days of application for refund. Refunds are to be granted to the dealers electronically based on the application in RFD-01 filed on government portal in all the cases mentioned above. However, there stands an exception of exports of goods with the payment of IGST, for which the details of the exports are to be filled in the Table 6A of GSTR-1 form and that form will be deemed as an application for refund.
Rule 96 of the CGST Rules govern the refund of integrated tax that is paid on the goods exported out of India. The rule states that the shipping bill that is filed by the exporter will be considered as the application for refund. Also, this application will be deemed to have been filed only when the details of the exports are furnished in Table 6A of GSTR-1 form and the applicant has filed a valid return in GSTR-3B form.
Though it appeared like a seamless procedure but the current refund scenario for GST exporters seems to be telling a different story altogether with the amount of pending refunds exceeding INR 5,400 crores.

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