Dated 31st May, 2018

IGST Refund in cases wherein records have not been transmitted from GSTN to Customs EDI System

IGST Refund in cases wherein records have not been transmitted from GSTN to Customs EDI System


Refund of IGST on exports though streamlined to a great extent however one major problem still remains, wherein such refund is withheld due to the reason that the data is not being transferred from the GSTN to the Customs EDI system. The reason for this non transmission of data being that exporters have inadvertently misdeclared IGST paid on export supplies as IGST paid on interstate domestic outward supplies while filing of Form GSTR-3B which have resulted in failure of the validation process, which was introduced in the GSTN system to ensure that the IGST paid on the export goods in any particular month is not less than the refund claimed by the exporter.

For readdressing this long drawn grievance of many exporters the Ministry of Finance under the Department of Revenue has come up with the Circular no. 12/2018-Customs dated 29.05.2018 in order to grant refund of IGST in cases where GSTR-1 and 3B has been wrongly filed or short IGST payment has been made.

On the above context the ministry has come up with an iterim measure which would in turn provide relief to many exporters at large:

  1. The Custom Policy Wing shall send a list of exporters for the period July’ 2017 to March, 2018 to GSTN whose cumulative IGST amount paid against exports and interstate domestic outward supplies, for the period mentioned in GSTR-3B is greater than or equal to the cumulative IGST amount indicated in GSTR-1 for the same period, pursuant to which GSTN shall send a confirmatory e-mail to these exporters regarding the transmission of records to Customs EDI system.
  2. On Refunds being processed/ sanctioned the exporter shall submit Chartered Accountant certificate before 31.10.18, stating that there is no discrepancy between the IGST amount refunded on exports and the actual IGST amount paid on exports of goods for the same period, to the custom office at the port of export or in case of multiple export any of the ports of export and a copy to jurisdictional GST office.
  3. In case cumulative IGST amount paid against exports and interstate domestic outward supplies together, for the same period mentioned in GSTR-3B is less than the cumulative IGST amount indicated in GSTR-1 for the same period the Custom Policy Wing would send the list of such exporters to the GSTN and all the chief Commissioner of Customs.
  4. The GSTN shall send an e-mail to all such exporters informing the reason for blockage of IGST amount and the exporters would have to make payment of IGST accordingly in the subsequent month.
  5. Proof of short payment of IGST (upto Rs. 10 lacs) amount shall be submitted to Assistant/Deputy Commissioner of Customs in charge of port where exports made or in case of multiple exports any of the port of exports in order to claim pending IGST refund. In case of short payment of IGST amounting to more than 10 lacs then a certificate from Chartered Accountant certifying that shortfall amount has been paid shall also be submitted.
  6. An undertaking to be given by the exporter that they would return the refund amount if not due to them.
  7. After processing of claim another certificate from Chartered Account shall be required from the exporter stating that there is no discrepancy between IGST amount refunded on exports and actual amount paid on exports.
  8. Non compliance of this procedure shall affect future IGST refunds.

Post refund audit


The exporters would also be subject to a post refund audit and in case departmental audit detects excess refunds to the exporters the details of such detection may be communicated to the concerned GST formations.

This circular deals only with cases where the records have not been transmitted by GSTN to Customs EDI system. Once such records are transmitted the usual procedure of IGST refund would be applicable to them. After transmission if errors like SB005, SB002, SB006 etc are encountered the earlier circulars shall apply to them.


IGST Refund in cases wherein records have not been transmitted from GSTN to Customs EDI System

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IGST Refund in cases wherein records have not been transmitted from GSTN to Customs EDI System

IGST Refund in cases wherein records have not been transmitted from GSTN to Customs EDI System
Founder Member

Bhaskar Thakkar

Chief Executive officer

BT Associates, India

thakkar@btassociate.com

Twenty years of exprience in tax practice, specialist in structuring & planing and tax optimization under indirect tax. Lead eastern India indirect tax practice of Ernst & Young in past.