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GST refund on export of goods (With payment of tax)

Exports are treated as zero-rated supply in Goods and Services Tax (GST). By making exports zero-rated means that the entire chain of export supplies is tax-free i.e. there is no tax burden either on the input or output. However, if tax is required to be paid on the export of goods or services at any point in time then a refund of tax can be claimed later.

Accordingly, exporters are entitled to claim the refund of integrated tax (IGST) paid on goods supplied outside India. To claim a refund in case of export of goods, the exporter does not require to file a separate refund application. The shipping bill filed by an exporter to ICEGATE shall be treated as a refund application for the purpose of refund of GST.

Conditions to claim GST refund in case of export of goods

Shipping bill will be considered as refund application only after following conditions are met-

  • Valid GSTR-3B has been filled. By "Valid" here means that self-assessed tax has been paid in full for the relevant tax period.
  • Export general manifest (EGM) has been filed

Further, the GST refund system will process refund only after the following validations:

  • Correct shipping bill details (bill no., bill date, port code) in GSTR-1 under Table 6A
  • Tax liability declared under table 3.1(b) of GSTR-3B shall not be less than the amount of IGST claimed under Table 6A of GSTR-1 for a particular period.

Detail of export invoices to be provided in Table 6A of GSTR-1

  1. Invoice number
  2. Invoice date
  3. Port code
  4. Shipping bill number
  5. Shipping bill date
  6. Total invoice value
  7. Supply type
  8. GST payment
  9. Item details

Note - Incorrect details of export supplies declared in GSTR-1 can be amended through Table 9A while filing GSTR-1 of the subsequent period.

What is the process of refund of tax paid on the export of goods?

After filing valid GST returns i.e GSTR-1 & GSTR-3B, the exporter is entitled to receive a refund of tax paid on the export of goods. Let’s see the process of the same.

Step 1: Common (GST) portal will validate the details declared in GSTR-1 with GSTR-3B.

Step 2: Then, the GST portal will share the export details declared in GSTR-1 with ICEGATE*.

Step 3: ICEGATE will match the GSTR-1 details with Shipping Bill and EGM data and process the refund. Any mismatch may lead to the rejection of a refund application.

Step 4: Refund payment will be credited electronically to the taxpayer’s bank account.

Step 5: ICEGATE will share the payment details with the GST portal.

Step 6: GST portal will send the payment details to the taxpayer through e-mail and SMS.

*ICEGATE – Indian Customs Electronic Gateway (ICEGATE) is the national portal of Indian Customs of Central Board of Indirect Taxes and Customs (CBIC) that provides e-filing services to the Trade, Cargo Carriers, and other Trading Partners electronically.

When is the exporter of goods not entitled to tax refund under GST law?

Exporter of goods shall not be eligible to claim a refund of tax paid in the following cases-

  1. Supplies are subjected to export duty
  2. Duty drawback of tax paid on export supplies has been availed by the taxpayer
  3. Tax burden has been passed to any other person
  4. Refund amount is less than Rs. 1000

What error codes can be generated in response to the refund application?

ICEGATE shall process the IGST refund only after validating shipping bill data with details provided in GST returns. In case of any mismatch between details declared in GSTR-1 with shipping bill data, the exporter will receive any of the following error codes-

  • SB001 - Invalid shipping details
  • SB002 - Export general manifest(EGM) not filled
  • SB003 - Mismatch of GSTIN declared in shipping bill and GSTIN used to file returns
  • SB004 - Duplicate submission of records (GSTR3 already filed)
  • SB005 - Invoice number declared in shipping bill is different from invoice number provided in GSTR1
  • SB006 - Gateway EGM is not available

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TaxGyata Team

TaxGyata Team