CBEC has issued clarifications on export related refund issues

CBEC has issued clarifications on export related refund issues

March 20, 2018 Fiscal, Industries, states 0

Central Board of Excise and Customs has issued Circular 37/11/2018-GST dated 15.03.2018 and has clarified various export relatedrefund issues-

The Key points of the Circular are:

  1. Non availment of drawback: A supplier availing of drawback with respect to basic customs duty only shall be eligible for refund of unutilized input tax credit of central tax / State tax / Union territory tax / integrated tax / compensation cess. It is also further clarified that refund of eligible credit on account of State tax shall be available even if the supplier of goods or services or both has availed of drawback in respect of central tax.
  2. Amendment through Table 9 of GSTR-1: The refund claims which are not being processed on account of mis-matches between data contained in FORM GSTR-1, FORM GSTR-3B and shipping bills/bills of export may be rectified through the facility of filing of Table 9 in FORM GSTR-1, an amendment table which allows for amendments of invoices/ shipping bills details furnished in FORM GSTR-1 for earlier tax period.
  3.  
  4. Exports without LUT: Export of goods or services can be made without payment of integrated tax where an exporter is required to furnish a bond or Letter of Undertaking (LUT) to the jurisdictional Commissioner before effecting zero rated supplies. In some cases, it has been noted that such zero rated supplies have been made before filing the LUT and refund claims for unutilized input tax credit have been filed.
  5. In this regard, CBEC has clarified that the substantive benefits of zero rating may not be denied where it has been established that exports in terms of the relevant provisions have been made. The delay in furnishing of LUT in such cases may be condoned and the facility for export under LUT may be allowed on ex post facto basis taking into account the facts and circumstances of each case.
  6. Exports after specified period: Any registered person may export goods or services without payment of integrated tax after furnishing a LUT / bond and that he would be liable to pay the tax due along with the interest as applicable within a period of fifteen days after the expiry of three months or such further period as may be allowed by the Commissioner from the date of issue of the invoice for export, if the goods are not exported out of India. The time period in case of services is fifteen days after the expiry of one year or such further period as may be allowed by the Commissioner from the date of issue of the invoice for export, if the payment of such services is not received by the exporter in convertible foreign exchange.
  7. In this regard, CBEC has clarified that exports have been zero rated under the Integrated Goods and Services Tax Act, 2017 as long as goods have actually been exported even after a period of three months, payment of integrated tax first and claiming refund at a subsequent date should not be insisted upon. In such cases, the jurisdictional Commissioner may consider granting extension of time limit for export as provided in the said sub-rule on post facto basis keeping in view the facts and circumstances of each case. The same principle should be followed in case of export of services.
  8. Self-declaration for non-prosecution: The facility of export under LUT is available to all exporters except to those who have been prosecuted for any offence under the CGST Act or the IGST Act or any of the existing laws in force in a case where the amount of tax evaded exceeds two hundred and fifty lakh rupees. It is to be noted that a person intending to export under LUT is required to give a self-declaration at the time of submission of LUT that he has not been prosecuted. Persons who are not eligible to export under LUT are required to export under bond.
  9. In this regard CBEC, has clarified that, this requirement is already satisfied in case of exports under LUT and asking for self–declaration with every refund claim where the exports have been made under LUT is not warranted.
  10. Refund of transitional credit: In the formula for “Net ITC” stated in rule 89 of the CGST Rule, it is clarified that the transitional credit pertains to duties and taxes paid under the existing laws and the same cannot be said to have been availed during the relevant period and thus, cannot be treated as part of ‘Net ITC’.
  11. Discrepancy between values of GST invoice and shipping bill/bill of export: In case where the value declared in the tax invoice is different from the export value declared in the corresponding shipping bill under the Customs Act, refund claims are not being processed. It has been clarified that during the processing of the refund claim, the value of the goods declared in the GST invoice and the value in the corresponding shipping bill / bill of export should be examined and the lower of the two values should be sanctioned as refund.
  12. Filing frequency of Refunds: It is clarified that the exporter, at his option, may file refund claim for one calendar month / quarter or by clubbing successive calendar months / quarters.
  13. BRC / FIRC for export of goods: It is clarified that in case of processing of refund claims related to export of goods Bank realization certificate(BRC) and Foreign Inward Remittance Certificates(FIRC) is not insisted in law . Henceforth, such proof of realization should not be insisted upon.
  14. Requirement of invoices for processing of claims for refund: A list of documents required for processing the various categories of refund claims on exports is provided in the table below.
Type of Refund Documents
Export of Services with payment of tax

(Refund of IGST paid on export of services)

– Copy of FORM RFD-01A filed on common portal

– Copy of Statement 2 of FORM RFD-01A

– Invoices w.r.t. input, input services and capital goods

– BRC/FIRC for export of services

– Undertaking / Declaration in FORM RFD-01A

 

Export (goods or services) without payment of tax

(Refund of accumulated ITC of IGST / CGST / SGST / UTGST / Cess)

– Copy of FORM RFD-01A filed on common portal

– Copy of Statement 3A of FORM RFD-01A generated on common portal

– Copy of Statement 3 of FORM RFD-01A

– Invoices w.r.t. input and input services

– BRC/FIRC for export of services

– Undertaking / Declaration in FORM RFD-01A

 

For further clarifications please refer the attached document.

Source: Central Board of Excise and Customs

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