Before diving into GST Refund: A Brief on Zero-Rated Supply

An export supply under GST law is alternatively termed as zero-rate supply. because the tax rate on export supplies is to effectively nullify to a zero amount.

Exports and supplies to Special Economic Zones (SEZ) are zero rated i.e. input tax credit will be available even if tax is not paid on output. This will make exports and supplies to SEZ really tax free.

Export benefits under GST – In relation to GST, following are the concessions/incentives for exports

1. Exemption from GST on final products
2. Refund of GST paid on inputs.

Refund process for Export

Incase of Exports or Supplies to SEZ, refund arises in following scenarios-

1. Refund of IGST paid on Export of goods with payment of tax
2. Refund of IGST paid on Export of services with payment of tax
3. Supplies to SEZ with payment of Tax
4. Refund of Accumulated ITC when Exports are made without payment of tax.

Refund of IGST in case of Export of Goods with the payment of IGST

Exporters can claim refunds on the IGST they paid at the time of the export. In this case, the GST refund process starts with the shipping bill. Exporters must file the shipping bill along with other export-related documents at the Indian Customs Electronic Commerce Gateway (ICEGATE).

Forms Involved

GSTR-1

GST refund process for exports happens through Form GSTR-1 on the GST portal. The following details are declared in GSTR-1 under Table 6A – Exports Invoice:

1. Invoice date
2. Port code
3. Shipping bill no./bill of export no.
4. Shipping bill date/bill of export date
5. Total invoice value and taxable value
6. GST payment (‘With Payment of Tax’ needs to be selected)
7. Whether the supply is eligible for tax at a differential percentage, as notified by the government
8. The tax amount (auto-populated, but can be edited)

These details have to match the data in the shipping bill, which is the primary export document.

GSTR-3B

Relevant amounts need to be added in Table 3.1(b) for the Outward taxable supplies (zero-rated). Exporters need to ensure the IGST amount entered in this table has to be equal to or greater than the total IGST filled in Table 6A of Form GSTR-1.

 GST RFD-01

To complete the GST refund process for exports, exporters need to file the Form RFD-01 as per the cases elaborated below.

Goods VS Services

In the case of goods export with tax payments, the shipping bill itself is treated as the refund application. RFD-01 application is not needed. Form GSTR-1 is reconciled with details from the shipping bill submitted with ICEGATE. ICEGATE, upon verification, sanctions the refund to the bank account submitted by the exporter.

RFD-01 is needed in case of export of services. While the RFD-01 form is available online under the GST portal, the details of service export have to be filled in using the offline utility, along with the refund amount and bank account. A successful filing generates the Application Reference Number (ARN), which the exporter can use to track the GST refund status.

Without payment of IGST

If the exporter does not want to pay tax (IGST) on the export, then the export needs to be covered under a Letter of Undertaking (LUT) or a bond. This opens up the option to claim ITC on the inputs/input services as a refund.

Forms Involved

Form GST RFD-11

This is the form exporters have to use to file their LUT. Along with the necessary details of the export, the taxpayer also needs to provide a digital signature.

In case of a bond, the refund process must be executed manually on a stamp paper, signed, and submitted to the jurisdictional Assistant Commissioner along with other relevant documents like Form RFD-11 on the letterhead of the taxpayer, bank guarantee, authority letter, etc. The Assistant Commissioner is required to issue an acknowledgment letter after verifying the submitted documents.

GSTR 3B and GSTR 1

File GSTR 3B disclosing correct amount in GSTR 3B in Table 3.1(b) in Zero Rated Supplies. In GSTR 1 specify appropriate invoice details in Table 6A/6B of GSTR 1.

RFD 01

Exporters need to file RFD 01 on common portal along with relevant annexures and statements. Obtain acknowledgement in RFD 02 specifying ARN generated on common portal. Submit documents to jurisdictional officer for further processing of refund manually.

If you are an exporter who needs further assistance with filing GST refunds, write to us with your queries.