Refund (Export), Goods and Services Tax - GST

[Sangeetha D]

"A GST-registered taxpayer (Mr. A) exports goods through a GST-registered intermediary but has incorrectly reported these sales under B2B (domestic supplies) instead of Table 6A (zero-rated exports). What steps should he follow to rectify this error and apply for a refund?"

Posts / Replies

[YAGAY andSUN]

To rectify the error and apply for a refund of Integrated GST (IGST) on zero-rated exports, Mr. A must takes the following steps:

Step-by-Step Process to Rectify the Error and Claim Refund:

1. Amend GSTR-1 (if possible):

If the error is in a past return period and the amendment window is still open (typically within the time limits prescribed under Section 37(3) of the CGST Act):

• File an amendment in Table 9A of the subsequent GSTR-1 return:
  • Correct the earlier B2B entry (domestic supply).
  • Report the export correctly under Table 6A (exports with payment of tax).

Note: The amendment can be made until the 30th of November following the end of the financial year or before filing the annual return (whichever is earlier).

2. File the Corrected GSTR-1:

• After amending the GSTR-1, ensure that the exports reflect properly in Table 6A and Table 6B of GSTR-1.
• Also ensure the data auto-populates in Table 6A of the refund application (RFD-01) on the GST portal.

3. Match with Shipping Bill Data:

Ensure that the details (invoice number, date, value, HSN, port code, etc.) in the corrected GSTR-1 match the corresponding shipping bill and EGM (Export General Manifest) data.

4. Apply for Refund (Form RFD-01):

• Once GSTR-1 is corrected and IGST is paid on such exports, file RFD-01 for claiming the refund of IGST paid on export of goods.
• Supporting documents may include:
  • Shipping bills
  • Export invoices
  • BRC/FIRC (if required)
  • Reconciliations and declarations as applicable

5. File GSTR-3B Consistently:

• Ensure that GSTR-3B also reflects IGST paid on zero-rated supply in Table 3.1(b).
• Any mismatch between GSTR-1 and GSTR-3B can cause refund rejections.

6. Contact Jurisdictional Officer if Portal Doesn't Allow Amendment:

If the time limit to amend the GSTR-1 has lapsed:

• Mr. A can approach the jurisdictional GST officer and request assistance to handle the matter.
• In some cases, a manual refund application may be allowed depending on the circulars/guidelines in force (e.g., CBIC Circular No. 125/44/2019-GST).

Key Legal References:

• Section 16 of the IGST Act – Zero-rated supplies.
• Rule 89 of the CGST Rules – Refund of tax.
• Circular No. 125/44/2019-GST – Clarifies refund procedures.

***

[CAJasmat Jidiya]

Based on your query, it appears that you supplied goods to a registered person, who subsequently exported them to an overseas customer. In this scenario, you are not considered as the exporter of the goods and therefore, you are not eligible to claim a refund under the export category.

Reporting the transaction as a B2B supply in GSTR-1 was correct.

However, if you supplied the goods at a concessional GST rate (i.e., 0.10%), you may be eligible to claim a refund under the inverted duty structure.

The above is my personal opinion based on the facts as understood. If the actual facts differ, the resolution may also vary accordingly.

[YAGAY andSUN]

Provided the Merchant exporter had exported the goods within 90 days from the date of selling the goods by Mr.A and the EGM date is shared accordingly with Mr. A .

[Shilpi Jain]

The person in whose name the shipping bill is will be eligible for the refund.

[Sangeetha D]

Even though the goods are exported through an intermediary, the shipping bill has the GSTN of Mr. A (the principal exporter).", In this case Can Mr. A apply for Refund. 

[YAGAY andSUN]

Based on the details provided, it appears that Mr. A supplied goods to a GST-registered intermediary, who subsequently exported those goods. In such a case, whether Mr. A can apply for a refund of the Integrated GST (IGST) paid on these exports depends on several factors:

1. Who is the Exporter?

GST Refund on Export of Goods: According to the provisions of the IGST Act, only the actual exporter (the person whose GSTIN is mentioned on the Shipping Bill) can claim a refund of IGST on exports.

If Mr. A is not the actual exporter, meaning the intermediary (merchant exporter) holds the GSTIN mentioned on the Shipping Bill, he is not eligible to claim the refund. Even though Mr. A supplied the goods, since the intermediary exported the goods, they (the intermediary) are considered the exporter for GST purposes.

2. Is Mr. A the Exporter under a Merchant Exporter Arrangement?

Merchant Exporter Scenario: If the goods were exported through a merchant exporter arrangement and Mr. A’s GSTIN is mentioned in the Shipping Bill, Mr. A could be eligible to claim a refund. This is because the exporter, in this case, would be considered as Mr. A since the goods are legally considered to have been exported by him.

However, this condition assumes that:

The goods were exported within the 90-day period from the date of sale by Mr. A to the intermediary.

The EGM (Export General Manifest) data is correctly reflected with Mr. A's GSTIN.

3. Eligibility under Concessional Rate of GST:

If Mr. A sold the goods at a concessional GST rate (e.g., 0.1%) and the intermediary exported them, he may be eligible to claim a refund under the Inverted Duty Structure (IDS), provided all conditions for IDS refund are met.

4. Correct Reporting in GST Returns:

If Mr. A mistakenly reported these sales under B2B (domestic supplies) instead of under the zero-rated export category (Table 6A in GSTR-1), he should amend the GSTR-1 as per the steps mentioned earlier. However, even after correction, the exporter in this case remains the one whose GSTIN appears on the shipping bill.

5. Key Points for Refund Eligibility:

The GSTIN on the Shipping Bill: This determines who the actual exporter is.

The merchant exporter must export the goods within the stipulated 90-day period.

If Mr. A is the exporter (his GSTIN is on the shipping bill), he may apply for the refund after correcting GSTR-1 and ensuring consistency across GSTR-3B and GSTR-1.

If the intermediary is the exporter (their GSTIN is on the shipping bill), the refund should be claimed by them, not Mr. A.

Conclusion:

If Mr. A is the actual exporter (his GSTIN is on the Shipping Bill), he can apply for the refund after rectifying the GSTR-1 as discussed.

If the intermediary is the actual exporter, Mr. A is not eligible to claim a refund. The intermediary would need to file for the refund of IGST on the export.

It would be prudent for Mr. A to verify the details on the Shipping Bill and ensure that the correct exporter is listed before proceeding with any refund application.