How to claim refund for reverse ITC in import

[Asked by Guest]

As per the prevalent practise, customs duty along with IGST is paid by the importer himself at the time of importing the goods. The procedure for filing refund application requires the importer to enter the Purchase details in the Excel Utility. However, the said Utility mandatorily requires the GSTIN of the Supplier, obtaining which is not possible in case of import since the Supplier is a foreign entity and as such there is no mechanism for establishing nexus between the customs EDI and GSTN.

Further, in the absence of any provision for filing returns by Customs Department through GSTR-1 or any other mode, the taxes paid by the importer does not reflect in the GSTR-2A therefore, the same fails to get validated under GSTR-3B as well. please suggest how to claim the amount.

[Rajagopalan Ranganathan]

Sir,

Can your elaborate further the facts involved. You say that as importer you have paid customs duties and IGST on imported goods. Then what is the ground on which you are claiming refund?

Sir,

A company is getting imported certain goods @18% IGST along with custom duty and its customers mainly include research organizations for whom GST payable is @ 5% GST(since research organizations receive exemption)..therefore is eligible to claim refund ITC.

A company X is getting imported certain hardware from country Y. At the time of importation, X is paying custom duty along with IGST. After importation, X in the capacity of Supplier is supplying the hardware to Research Organization (along with other customers) at the rate of 5% GST. Since the Input is greater than output rate, X is eligible for ITC refund. At the time of filing for online refund application, the excel utility requires X to enter GSTN number of the Supplier, which cannot be obtained for imports since the taxes are paid to customs, because of which the application does not get completed and hence fails to submit.

On the contrary, if X tries to get the same through form 3B (column No. 4), the sheet again fails to validate since there is no GSTR-1 filed by the customs and the same does not get reflected in GSTR-2A of X.

[Ganeshan Kalyani]

Refer Circular No.79/53/2018-GST dated 31.12.2018.

Sir,

The circular does not specifically deal with this matter.

Can we opt for physical filing?

[SHARAD ANADA]

Refer Notification Notification No. 74/2018 – Central Tax 31st December, 2018 page 8 instruction under Statement 1A [rule 89(2)(h)] * In case of imports or supplies received under reverse charge mechanism [sub-section (3) of section 9 of the CGST Act/SGST Act or sub-section (3) of section 5 of IGST Act], the GSTIN of supplier will mean GSTIN of applicant (recipient).

Thankyou for your advice.

However, the Excel Utility is not accepting the GSTIN of applicant and giving an error.

After entering the GSTIN of Applicant in the column for Supplier, the application is getting submitted. However, at the time of validating RFD-01A with GSTR-1 and GSTR-2A, it is not getting validated and showing an error

AI Summary

Refund of unutilized input tax credit blocked by validation gaps between customs records and GST returns, hindering importers' claims.
Importers who pay IGST at import cannot supply a foreign supplier GSTIN required by the refund excel utility; customs do not file GSTR-1 entries so taxes paid on imports do not appear in GSTR-2A, causing RFD-01A validation failures. Notification guidance permits using the recipient's GSTIN as supplier GSTIN for imports/reverse-charge supplies, but portal/utility rejection and GSTR-1/GSTR-2A reconciliation errors persist, evidencing a gap between customs EDI and GSTN processes that blocks online refund claims.