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The process to claim IGST refund on exports, track refund status, and important provisions for refunds of export goods, explained for ease.

How to Claim IGST Refund on Exports

Understanding the process of claiming Integrated Goods and Services Tax (IGST) refunds is crucial for exporters to optimise their financial operations under the GST regime. 

Therefore, here is a comprehensive guide on how to claim an IGST refund on exports, ways to track the refund status, and an important clause for refunds of export goods.

Introduction

Exporters engaging in the export of goods and services are entitled to claim refunds on IGST paid during their transactions. Whether exporting goods with or without tax payment or providing services, the process of claiming IGST refunds involves specific steps and documentation requirements. 

By following the procedures diligently, exporters can ensure a smooth refund process, maximise their benefits, and comply with GST regulations effectively. How? Well, here’s the entire process for your convenience!

Procedure to Claim IGST Refund on Exports

Following are the steps that will help you learn how to claim IGST refund on exports under different conditions.

Goods Exported with Payment of Tax

The shipping bill serves as the refund application when exporting goods with tax payments. It is essential to align details in Form GSTR-1 with the shipping bill for a seamless refund process. 

ICEGATE processes the refunds, which are then credited directly to the exporter’s bank account.

Export of Services

For services exported, a separate refund application in Form RFD-01 is required. 

This application can be submitted through the GST portal, and tracking can be done using the Application Reference Number (ARN). Uploading necessary details accurately is key to ensuring a successful refund claim.

Goods Exported without Payment of Tax

Exporting goods without paying IGST under a LUT or bond allows for a refund of unutilised input tax credit. Filing the LUT in Form GST RFD-11 and submitting the bond are essential steps in this process. 

This method enables exporters to claim refunds efficiently while complying with GST regulations.

Filing Process

Submitting the EGM or Export Report along with GSTR-1 and GSTR-3B returns is crucial for claiming IGST refunds smoothly. 

Accuracy in filing these returns is essential for automatic refund processing. Ensuring that details in GSTR-1 Table 6A and GSTR-3B match is vital for a successful refund claim.

Claiming Refund of ITC on Exports without Tax Payment

To claim a refund of Input Tax Credit (ITC) on exports without tax payment, filing a refund application in Form GST RFD-01 is necessary. 

Providing accurate turnover details for zero-rated supplies and adjusted total turnover is key to a successful refund claim. Maintaining precision in the application process is crucial as rectification post-submission is not permitted.

Ways to Track IGST Refund Status

Now you may think about the procedure to track the refund of IGST paid on export of goods. So here we are with the answer. Keep reading.

  • Log in to the ICEGATE website and look for the IGST validation status there. Here you will learn whether there are any errors or not, and accordingly, you can take the required action to resolve the issue.
  • If you do not find your shipping bill details on ICEGATE, go to the GST portal. Here, under the Refunds section click the option saying, “Track status of Invoice Data to be shared with ICEGATE”.  

Now you will get the list of failed invoices that are not transmitted from GSTN, and the reason. Afterwards, you can do the needful to resolve the errors. If you find any difficulty, consider connecting to professional DGFT consultants.

Important Provision for IGST Refund on Export of Goods

In March 2020, the Central Board of Indirect Taxes and Customs (CBIC) introduced Rule 96B, which plays a significant role in the process of IGST refund on exports. 

This rule mandates that if foreign currency from an export shipment is not realised within the timeframe specified by the Reserve Bank of India under the Foreign Exchange Management Act (FEMA), the IGST amount must be repaid along with interest at a rate of 18% per annum within 30 days after the expiration of the prescribed period. 

This provision is crucial for both IGST refunds and the refund of unutilized Input Tax Credit (ITC).

To Sum Up

Knowing the process of claiming IGST refunds on exports is beneficial, and recommended for exporters aiming to recoup taxes on their exported products or services. 

This process not only amplifies the competitive edge of Indian goods in the global market but also delivers financial advantages to exporters, streamlines export procedures, and promotes adherence to tax statutes. 

While challenges like processing delays and intricate documentation requirements may arise, the IGST refund mechanism stands as an important driver for export ventures, nurturing the growth and expansion of international trade.

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