Export Refund Under GST | GST Refund Consultants

What is Refund under GST?

Globally, it is a general norm that exports should be zero rated, i.e., only the real value of goods/ services should be exported and not the taxes. In line with this objective to make Indian exports competitive in the international markets, The Government of India has implemented various policies/ laws to ensure that exports are not burdened with excessive taxes or duties and various options have been provided to the exporters to make their exports tax-free. On similar lines, GST also provides for certain conditions where Export of services would be zero rated. Under GST regime, money is refunded under the zero-rating principle to promote exports. It has been ensured that the tax refunds are done at the earliest so that the rhythm in export growth is maintained. Refund in case of exports is possible under two scenarios:

Exports of goods and services without payment of tax (filing LUT)
Exports of goods and services with payment of tax (payment of IGST)

Types of Refund under GST?

Refund under the GST law may arise under different circumstances as under. Below are the types of refund under GST.

Exports of goods or services
Domestic supplies
- Supplies to SEZs units and developers
- Deemed exports
Inverted Duty structure
Purchases by specified persons
- United Nations or embassies of foreign countries in India
- International tourists at the time of their departure from India
Administration and compliance
- Judgement, decree, order, Direction etc. of any appellate authorities or courts
- Pre-deposits
- Advance tax payments
- Excess payments
- Provisional assessments

GST Refund via LUT Route?

Letter of Undertaking is an undertaking given to the GST authorities for export of goods and services without any payment of taxes. The LUT shall have a validity period till the end of the relevant financial year and a fresh LUT has to be filed and applied every financial year. In this connection, the exporter agrees to fulfil certain conditions and agrees to be bound by the declaration given in the LUT. Conditions for LUT
- Goods are should be exported outside India within 3 months from the issuance of export invoice
- Services equivalent to the amount invoice should be actually rendered
- Realisation of export proceeds in convertible foreign exchange should be received within one year from the date of invoice
In case of failure to realise the amount in convertible foreign exchange or failure to export goods/ services as applicable, applicable Integrated Goods and Services Tax (‘IGST’) computed along with interest at 18% per annum shall become payable Upon realisation of export proceeds in convertible foreign exchange, the taxpayers would be eligible to file a refund application by furnishing the required details in the GST portal. The refund of the Input Tax Credit (‘ITC’) standing to the credit of the taxpayer shall be eligible for refund.

GST Refund via IGST Route?

Export of goods and services could be undertaken based on payment of applicable taxes at the time of export. In this connection, the existing ITC in the books of the taxpayers could be utilised for payment of applicable IGST arising on the value of exports. Upon export of services and subsequent realisation of the export proceeds, the taxpayers would be eligible to file a refund application by furnishing the required details in the GST portal. The applicable taxes paid on export shall be eligible for refund. In case of export of goods via ship or air, the Shipping Bill/ the Airway Bill would itself act as a refund application and shall follow due course of law for grant of refund of the IGST paid on exports.

Tag of “Risky Exporter”: Pain to Genuine Exporter

if you are one of the exporters who is bearing a tag of risky exporters and your refund is put on hold by the GST Authority then this article may help you to resolve this issue.

Once the application has been processed and order passed, plain effect of same can’t be avoided

Once the application had been processed and or order passed, which has attained finality, the respondents cannot escape the plain effect of the same. They also cannot escape the liability of interest that arises on non-compliance of the same.

Export through Courier| IGST Refund process through ECCS Application (Express Cargo Clearance System)

Shipping bill filed for export of goods is automatically considered as Refund application and upon processing of shipping bills on IECGATE, the system will automatically process the refund of IGST.

Statement-3 & 3A| Annexure to GST Refund application in form GST RFD-01

Under Goods and Service Tax (“GST”), refund is admissible on various grounds. Refund application is filed in form GST RFD-01 and different supporting documents are required to be filed along with refund application for different type of refund applications. Any deviation in supporting documents can lead to rejection of a refund application.

GST paid on outward supply at reduced rate by claiming exemption notification| ITC accumulated can’t be refunded under “Inverted Duty Structure”

GST paid on outward supply at reduced rate by claiming exemption notification| ITC accumulated can’t be refunded under “Inverted Duty Structure

Manner of calculation of Adjusted Total Turnover for GST Refund | Clarified

Considering the representation, CBEC has clarified various refund related issued vide Circular No. 147/03//2021-GST dated 12th March, 2020 where following issues are clarified:

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Know More about GST Refund

What is Refund under GST?

Types of Refund under GST?

GST Refund via LUT Route?

GST Refund via IGST Route?

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