Summary of the IGST Refund Process For Price Revisions After Export
Goverment has annouced IGST Refund Process For Price Revisions After Export through the Circular No 226/20/2024.Trade and industry representative have asked the government to create system for refunding the extra IGST paid when the price of exported goods increases after they have already been exported. They explain that sometimes after goods exported, the price needs to be adjusted due to factors like changes in international market prices or specific terms in the contract. when the prices goes up, exporters have to pay additional IGST along with interest, but currently, there is no system in place for them to claim refund for this extra tax they paid.
Keypoints of the Summary of IGST Refund Process
- Process for filing refund application of additional IGST paid after export of goods
- Minimum Refund amount
- Time limit for filing refund
- Documents required to file refund application
- Verification by the Jurisdictional GST officer
- Refund sanction order in GST RFD-06
- Refund Process in case of price reduction after export
1. Process for filing refund application of additional IGST paid after export of goods
- Currently, there is no system in place to process the refunds for any extra IGST paid when the price of goods is increased after they have been exported. To solve this , Government has decided that, exporters can now submit a refund application for additional IGST paid by using FORM GST RFD-01, which they can file electronically on the common portal. For that, the Notification No 12/2024- CT dated 10-07-2024 have been updated to allow the refund application handled according to rule 89 of CGST Rules,2017.
- The GSTN is working to create separate category for GST RFD-01 for exporters who have paid extra IGST due to price revision after exports. Exporters must submit all the necessary documents mentioned in Rule 89 of CGST Rules,2017 including 9A and 9B statements.Until new category is available on the portal , exporter can still apply for the refund by selecting category of “Any other” and add note which specifies Refund of additional IGST Paid due to increase in price after export.
- The GSTN will give the access to the jurisdictional GST officer to review the application. GST officer will verify the shipping information, the IGST amount of refund. already approved IGST Refund under rule 96(3) of CGST Rules,2017.This information will help the GST Officers in processing the refund claims for the additional IGST paid by the exporter.
2. Minimum Refund amount
As per section 54(14), No refund u/s 54(5) & 54(6) shall be paid if the amount claimed is less than on e thousand ruppes.
3. Time limit for filing refund
As per new rule of 89(1B) of CGST Rules,2017, the exporter can apply a refund of additional IGST Paid with in 2 year from relavant date defined in section 54 of CGST Act,2017. However, if the relaevant date occured before this new rule came in to effect , the exporter has 2 years from the date this rule started to apply for the refund.
4.Documents required to file refund application
Following documents required to be accompained with the refund claim:
(a) Copy of shipping bill or bill of exports
(b) Copy of original invoices
(c) Copy of contract/other documents, as spplicable, indicating requirement for the revision in price of such goods subsequent to exports
(d) Copy of original invoices as well as relevant debit notes/supplementry invoices
(e) Proof of payment of additional IGST and applicable interest and details of the relevant FORM GSTR-1/ FORM GSTR-3B furnished by the applicant in which the said debit notes/supplementary invoices were declared and tax and interest thereon had been paid by the applicant.
(f) Proof of receipt of remittance of additional foreign exchange(FIRC) issued by Authorised Dealer-I banks
(g) A certificate of a practising chartered accountant or a cost accoutant certifying therein that the said additional foreign exchange remittance is on account of such upward revision in price of the goods subsequent to export.
(h) Statement 9A of FORM GST RFD 01 and
(i) Statement 9B of FORM RFD 01.
5. Verification by the Jurisdictional GST officer
The proper officer will check following documents while processing the refund claim.
- all the invoices attached including debit notes if any in their FORM GSTR-1
- Payment of additional IGST along with required interest amount in GSTR-3B
- Revised value of the goods reported by the exporter in GSTR-1 & GSTR-3B.
- Foreign exchange payment received by the exporter.
6. Refund sanction order in GST RFD-06
If the officer is satisfied that, refund application is complete and met all the required crieteria then they will issue refund sanction order in GST RFD-06 and a payment order using FORM GST RFD-05. The officer will upload speaking order along with the refund sanction order in GST RFD-06 by following the guidelines provided in Instruction No.03/2022-Dated 14-06-2022.
7. Refund Process in case of price reduction after export
It may that the price of goods might be reduced after they have been exported especially when the export was done with the payment of IGST. In such case , the exporter must return the IGST refund they received in the portion of the price reduction along with any applicable interest. The propoer officer will also check if the exporter has returned the excess refund amount in cases where the price of the goods was reduced after export, during the relevant tax period.
