Export under LUT and on payment of IGST, IGST payable on export

[Narendra Soni]

Dear Experts,

Can I export some shipments under LUT as well as some shipments on payment of IGST in a same tax period, and claim refund claims of ITCas well as IGST respectively of export shipments.

Can I export under LUT during a tax period and switch over to on payment of IGST in alternate tax period.

Being IGST is set off in electronic credit ledger once for a month at the time of filling GSTR 3B, How export on payment of IGST would be treated, It would be payable at the time of export and will be paid from ITC at the time of GSTR3B return. Would it be treated as IGST on payment of IGST.Is it allowed in GST act.

[Nash Industries I Pvt Ltd]

One export shipment can be under LUT while another export shipment can be on Payment of IGST. you can claim refund of IGST paid on the export shipment. there is no bar on such transactions. You can also ship under LUT in one month and export under claim of rebate on payment of IGST in another month.

The refund of IGST is allowed only after payment of taxes and filing of the returns.

Regards

S.Ramaswamy

[Kishan Barai]

Exporters complaining about delay in grant of refunds pertaining to Integrated Goods and Services Tax (IGST) paid on goods exported out of India and similarly Input Tax credit (ITC) on exports. Media reports with incorrect estimations of refund amounts held-up for the period July to October 2017 have been noticed. It is clarified that the quantum of IGST refund claims as filed through Shipping Bills during the period July to October 2017, is approximately ₹ 6,500 crore and the quantum of refund of unutilized credit on inputs or input services, as per the RFD 01A applications filed on GSTN portal, is to the tune of ₹ 30 crore.

With regard to IGST paid on goods exported out of India, majority of refund claims for exports made in July, 2017, wherever due, have been sanctioned. Refund claims of IGST paid for exports made in August, September and October 2017 are being sanctioned seamlessly wherever returns have been accurately filed. The prerequisites for sanction of refund of IGST paid are filing of GSTR 3 B and table 6A of GSTR 1 on the GSTN portal and Shipping Bill(s) on Customs EDI System by the exporter. It is essential that exporters should ensure that there is no discrepancy in the information furnished in Table 6A of GSTR 1 and the Shipping Bill. It has been observed that certain common errors such as incorrect Shipping Bill number in GSTR1, mis-match of invoice number and IGST amount paid, wrong bank account etc. are being committed by exporters while filing their returns. These errors are the sole reason for delay in grant of refunds, or rejection thereof. While information has been made available to Exporters on the ICEGATE portal if they are registered, they may also contact jurisdictional Customs authorities to check the errors they have committed in furnishing information in GST returns and Shipping Bill, and rectify them at the earliest.

As the Customs System is designed to automatically grant refunds without involvement of any officer by matching information that is furnished on GSTN portal and Customs system, the onus is on the exporters to fill in all the details accurately. Exporters may, therefore, take due precaution to ensure that no errors creep in while filing Table 6A of GSTR 1 of August 2017 and onwards. The facility for filing GSTR 1 for August 2017 would also be ready by 4th December 2017. In case of wrong entries made in July, Table 9 of GSTR 1 of August month would allow amendments to GSTR 1 of July 2017.

As far as refund of the unutilized Input Tax Credit on inputs or input services used in making exports is concerned, exporters shall file an application in FORM GST RFD- 01A on the Common Portal where the amount claimed as refund shall get debited from the Electronic Credit Ledger of the exporter to the extent of the claim. Thereafter, a proof of debit (ARN- Acknowledgement Receipt Number) shall be generated on the GSTN portal, which is to be mentioned on the print-out of the FORM GST RFD-01A and to be submitted manually to the jurisdictional officer. The exporters may ensure that all the necessary documentary evidences are submitted along with the Form GST RFD 01Afor timely sanction of refund.

Exporters are, therefore, advised to immediately file (a) Table 6A and GSTR 3B, if not already done, for processing of IGST refund (b) RFD 01A on GSTN portal for refund of the unutilized input tax credit on inputs or input services used in making exports and (c) GSTR 1 for August 2017 for amending details provided in July GSTR1 wherever required. The Government has taken various measures to alleviate the difficulty and is fully committed to provide speedy disbursal of refunds due to exporters.

AI Summary

Export under LUT or payment of IGST: exporters may choose either method and seek corresponding refunds after proper filing. Exporters may use LUT for some shipments and pay IGST for others in the same tax period and may switch methods across periods; IGST refunds are available only after payment and filing of returns. IGST refund sanction requires filing GSTR 3B, completing Table 6A of GSTR 1, and matching Shipping Bill entries on Customs EDI; errors in these filings delay or reject refunds. Unutilized Input Tax Credit refunds require FORM GST RFD 01A on the portal, debit from the Electronic Credit Ledger, generation of ARN, and submission of supporting documents to the jurisdictional officer.