Refund On Exports: Now Easy

Exporters of goods and services as well as suppliers to SEZ units are now get GST refunds automatically from the department to have ease scrutiny of refunds and fast settlement of claims. Under GSTN as per section 16(3) of the IGST Act,2017, two options are available for refund on account of ‘Zero-rated’ supplies, either through letter of undertaking (LUT) or through claim Input Tax Credit (ITC) on exports, by way of IGST. Currently, the facility of automatic refund is available to those exporters paid Integrated Goods and Services Tax (IGST).

The major problem arises for refund is:-

Problem No.1 – “I filed my GST returns but not getting refund?”

Solution:

The IGST refund would not be processed if it fails any validation at the level of either GSTN or Customs system. Validations are:
(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

Correction: –

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.

Problem No.2 – “I have filed correct information in GST return but still my refund is
not sanctioned?

Solution: The matching of data by GSTN with Customs systems , tracked out following errors:

This occurs due to clerical error made by exporter, mentioning of wrong shipping bill number furnished in GSTR 1/Table 6A, which can be rectified by making amendments in GSTR 1 by using Form 9A.

Exporter has to approach their shipping line/airline/carrier to file Export General Manifest
(EGM) immediately.

This error occurs when GSTIN declared in the shipping bill does not match with the GSTIN mentioned in the corresponding GST return. In this case too, the exporter has to make necessary changes in GSTR I by use of amendment Form 9A. Exporters should note that there is no provision of amendment in the shipping bill once the EGM is filed.

This error occurs due to duplicate/repeat transmission of shipping bill – invoice record from GSTN. The previous transmission would have already been validated for IGST refund by ICES.

This one is the most common and repeated error committed by the exporters, occurs due to mismatch of invoice number as mentioned in the invoice table of the shipping bill and that of mentioned in the GSTR 1 for the same supply. This happens due to:
(i) The typographical mistake while entering data in GSTR 1 or the SB.
(ii) The exporter uses two sets of invoices, one invoice for GST and another invoice for exports resulting in mismatch of invoice numbers.
As per the GST Law, the invoice number shall be matched with GSTN to validate exports and IGST payment. There should not be any difference between commercial invoice and GST invoice. IGST is to be paid on the actual transaction value of the supply between the exporter and the consignee, which should be the same as the one declared in the commercial invoice.
If the error SB005, is due to a data entry (typographical) mistake in GSTR 1, it can be amended in Form 9A. But once EGM filed, SB cannot be amended. Also, if the exporter has used a separate invoice in the Shipping Bill, he cannot include that in his GSTR 1 in lieu of his GST invoice. Thus, SB005 error, as of now, cannot be corrected by any amendment either in GSTR
1 or in the shipping bill. It is advised that the exporters should take care so as not to repeat such mistakes in future and ensure that the same GST compliant export invoice is declared at both ends For these cases, a mechanism is being considered by the Board to make the requisite corrections manually in line with the recent amendments in Rule 96 of the CGST Rules, 2017. The said mechanism is expected to be available shortly. It may, however, be noted that these interim workarounds shall only be available as a one-time measure for the past SBs.

This error occurs, in case of exports through Inland Container Depot (ICD), if the gateway EGM is not filed electronically or it contains some error. It is noticed that gateway EGM in case of many ICD shipping bills have been manually filed, leading to such refunds not being processed. While the Customs at gateway ports are pursuing this matter with the shipping lines, the exporters can also approach their shipping line to file the EGMs electronically.

This error comes when all the constraints like GST1N, SB number, invoice number etc. match between GSTN and Customs databases. This code states that the SB is ready for inclusion in the IGST refund scroll. But it may happen in some cases that SB does not appear in the refund scroll. This could be due to:
(i). The exports might have been made under bond or LUT, hence not eligible for refund.
(ii). If a shipping bill covers multiple invoices, few of the invoices might have been successfully validated and other invoices might have some errors
(iii). Composite rate of drawback claimed for such shipping bill during transitional period between 01.07.2017 to 30.09.2017, thus making shipping bill ineligible for IGST refund.
(iv). Where the IGST claimed amount is less than Rs 1000/-.
When this type of error occurs approach to EDI section at gateway port customs with correct bank account number, bank name, bank address and IFSC code.

CA RANJAN MEHTA
+91-9672372075
S-15, 16 Krishna Mall, Laxmi Mandir Tiraha,
Tonk Road, Jaipur (Raj) 302015
Email: rmaoffice.gst@gmail.com