How to claim refund of Input Tax Credit and tax paid on exports of goods or services
Here, we aim to discuss the new procedures around claiming refund of GST for businesses engaged in export of goods or services. Earlier due to the unavailability of electronic fund module on common portal, a temporary mechanism was devised and implemented wherein applicants were required to file the refund of application and the supporting documents manually.
To make the process electronic, a circular was passed after which the refund application along with supporting documents shall be submitted electronically. However, the provisions of the following circular shall apply for the applications filed on the portal before 26 September 2019 and the said applications shall be processed manually.
Before we move further to explain the simplification of process, we need to understand the basic process underlying the exports with the refund perspective.
There are 2 modes under which one can carry on export in India as far as GST is concerned
Mode 1: Export of goods on the payment of Integrated tax & then exporter can claim the refund of GST paid on such goods exported.
Mode 2: Export of goods or/and services under bond or Letter of Undertaking (LUT) without paying any Integrated tax & claiming the refund of unutilized input credit.
Under Mode 1: The exporter would first pay IGST and then claim refund after the goods are exported. The exporter should comply with the following before applying for the refund:
Upon the receipt of the information regarding the furnishing of a valid return in Form GSTR-3/Form GSTR-3B from the common portal, the system designated by the Customs shall process the claim for refund and an amount equal to the integrated tax paid in respect of each shipping bill/bill of export shall be electronically credited to the registered bank account of the applicant.
Under Mode 2: The exporters can export the goods without payment of IGST, by submitting a LUT and further they can claim the refund of unutilized input credit.
Following procedure needs to be adopted:
The details as filed in the GST returns would be transmitted electronically by the GST common portal to the system designated by the Customs, and this would generate a confirmation that the goods covered by the said invoices have been exported out of India.
Step 1: Filling Form GST RFD-01/1A:
First step for refund is to file refund application in GST FORM – 01 or GST FORM – 1A on common portal.
Step 2: Submission of application & other required documents to the Jurisdictional officer:
The common portal shall generate Acknowledgement receipt number which would be submitted to jurisdictional proper officer along with GST RFD FORM – 01/1A along with supporting documents.
Step 3: Initial scrutiny of the documents by the proper officer:
After scrutiny of application, Deficiency Memo in GST RFD-03 or Acknowledgement in GST RFD-02 will be issued within 15 days from the date of application submitted under Step – 2.
Step 4: Grant of Provisional Refund:
Provisional refund shall be granted within 7 days of acknowledgement and shall be credited directly to the bank account of applicant of acknowledgement in GST RFD-04. Payment advice shall be issued in FORM GST RFD – 05.
Step 5: Detailed scrutiny of refund application:
Following will be scrutinized in detail by officer:
Step 6: Final order of refund:
Final order is to be made in form GST RFD-06.
The earlier process required the refund application to be made online. Though the applicant was required to furnish the physical documents to the jurisdictional officer before he could further take the application in process. Now, this has been done away with. All the documents can be submitted electronically. This will make the refund process entirely online, easy & hassle free
The proper officer shall refund ninety percent of the refundable amount of claim on a provisional basis.
While filing the refund application, the applicant can select a bank account as given at the time of registration in Form GST REG 01.
If the applicant is not provided with the refund within 60 days of submission of application, then interest at the rate 6 percent from the date of export if 60 days is to be given to the applicant.
|Type of refund||Documents to be filed online.||Supporting documents|
|Refund of unutilized ITC on export without payment of tax.||Declaration stating that no ITC has been availed for export if zero rated supplies||Copy if GSTR 2A of the relevant period.|
|Undertaking stating that if refund is not eligible, the applicant is required to pay back the refund along with interest||Statement of invoices (Annexure B)|
|Statement regarding export without payment if tax||Self-certified copies of invoices entered in Annexure B if details are not found in GSTR 2A of relevant period.|
|Statement regarding calculation of refund amount.||BRC/FIRC in case if export or services and shipping bill|
|Refund of tax paid on export of services made with payment if tax||Declaration stating that no ITC has been availed for export if zero rated supplies||BRC/FIRC or any other document indicating the receipt of sale proceeds of services.|
|Undertaking stating that if refund is not eligible, the applicant is required to pay back the refund along with interest||Copy if GSTR 2A of the relevant period.|
|Statement regarding export of services with payment of tax||Statement of invoices (Annexure B)|
|Self-certified copies of invoices entered in Annexure A if details are not found in GSTR 2A of relevant period.|
|Self-declaration regarding none prosecution for availing provisional refund.|
GSTIN of supplier
Name of supplier
State tax/ Union territory tax
Eligible for ITC
Amount eligible ITC
Whether invoices included in GSTR 2A