A complete guide on GST Returns on Exports & Refund Process

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A Complete Guide on GST Returns on Export and Refund Process 


Under the GST law, the export of goods and the refund process in relation to such exports have always been critical topics. After all, there are various different provisions applicable to different circumstances. Then there are refund and return processes that are too lengthy and complex. To cater to these difficulties, a new GST return system was implemented back in 2020. 

In this article, we will try to understand those return and refund processes in relation to the export of goods. 


GST Refund Process for Export Under the Present Return Filing System 

Export of goods can be done in two ways- 

  • with payment of tax i.e. IGST where refund of such tax is claimed and 
  • Without payment of tax or through Bond or Letter of Undertaking where refund of unutilised and eligible ITC is claimed. 


The refund and return process in case of export with payment of tax is as follows: 


Step 1: Reporting in ICEGATE

The first step in the refund and return process is to file the shipping bill and other supporting documents on ICEGATE i.e. Indian Customs Electronic Commerce Gateway. 

Step 2: GSTR 1 Filing 

The next step into the process is to file GSTR 1 where the taxpayer needs to declare the following details in "Table 6A - Export Invoices" of GSTR 1: 

  • Invoice date
  • Port code 
  • Shipping bill number 
  • Shipping bill date 
  • Total taxable and invoice value 
  • GST payment (in case export is by payment of taxes)
  • Whether the supply is eligible for tax at a differential percentage, as notified by the government 
  • The auto-populated tax amount 

The details declared here in the GSTR 1 should match with the corresponding details shown in the Shipping bill. 

Step 3: GSTR 3B filing 

Once all the details are declared I'm the GSTR 1, the relevant details need to be uploaded in GSTR 3B. The taxpayer should fill the relevant amount in "Table 3.1 (b) - Outward Taxable Supplies (zero rated)" of the GSTR 3B. The amount of IGST entered here must not be less than the amount filled in Table 6A of GSTR 1. 

Step 4: Form GST RFD-01 filing 

While claiming the refund in case of export of services, it is also necessary to file Form GST RFD-01 from the GST portal. For export of goods, the shipping bill is sufficient enough hence there is no need of filing a separate GST RFD-01 form for claiming refund. 

After the successful submission of the form along with all documents, an Application Reference Number will be generated. The taxpayer can use this number to track the refund application. 

The refund and return process in case of export without payment of tax is as follows: 

When the taxpayer exports goods without payment of tax, then a bond or letter of Undertaking is filed. 

Further, since the refund of unutilised and eligible ITC related to the inward supply of goods or services used for making of export goods, is claimed. 

The return process, in this case, is similar to that of export with payment of tax. The taxpayer needs to file GSTR 1 and GSTR 3B the same usual way. 


For refund, the taxpayer shall follow this process: 


Step 1: Filing of LUT under Form GST RFD-11 

Log in to the GST portal then go on to the Services then User Services then Furnish LUT. There the taxpayer needs to furnish all the relevant details and submit the form after uploading the digital signature. 

Filing of bond

Unlike LUT, the bond is filed manually on a stamp paper. The taxpayer shall sign the bond and submit it to the jurisdictional deputy or assistant commissioner along with relevant supporting documents. The taxpayer who have evaded GST of Rs.2.5 crores or above should furnish bond and not LUT for exporting the goods without payment of GST.

Step 2: Filing Form GST RFD-01 

To claim the ITC refund on export of goods, filing of Form GST RFD-01 is mandatory. The taxpayer shall enter the following details in the Form GST RFD-01: 

  • Details of unutilised ITC related to export of goods and 
  • A confirmation that Form GST RFD-011 has been filed. 

After entering all the details, add the digital signature and submit the form along with the bond or LUT. Similar to the refund process in case of export with payment of tax, an Application Reference Number will be generated after successful submission of the form along with all documents. The taxpayer can use this number to track the refund application. 

GST Refund Process for Export Under the New Return Filing System 

The new return and refund filing process is comparatively easier and less complex. The filing of Form GST RFD-01 and Form GST RFD-11 is the same in this new process as well. However the changes have been made in the return filing process. In place of GSTR 1, GSTR ANX 1 and in place of GSTR 3B, GST RET 1 are now filed. 

GST ANX 1: In this form, invoice details of the export are uploaded like serial number, date, value, credit and debit note, along with: 

  • HSN code at the 6-digit level 
  • Taxable value and the applicable tax rate
  • Relevant tax amount, in case of export with payment of tax. 
  • Shipping bill number and date 

These details need to be uploaded in "Table 3C - Exports with Payment of Tax" and "Table 3D - Exports without Payment of Tax" depending on whether the tax is paid on export or not. 

GST RET 1: is a declaration form where the tax amount in relation to the export is declared. When the taxpayer uploads the value and tax amount in ANX 1, it gets auto-populated in Table 3A of GST RET 1. 


Conclusion 

After the introduction of this new system, the return and refund processes have become much more simple for the taxpayers. One major benefit of this is the auto-population of tax amounts from ANX 1 to RET 1. This reduces manual entries and possibilities of error which often leads to bogus refund claims. 

The refund process and reporting has become more seamless in this new system. Although, no major changes have been implemented in the return process of exports. But it can be said that these new changes have brought a lot of ease for the taxpayers and the professionals. 


Author : Simran

Date     : 01-Jul-2022


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