On August 6th, 2024, the Government of Rajasthan has introduced a revised procedure for handling the refund of additional Integrated Goods and Services Tax (IGST) paid when the price of goods is revised upward after their export. This new mechanism addresses the concerns raised by the trade and industry sectors regarding the lack of a clear process for claiming refunds in such scenarios.
Key Highlights of the Circular
1. Background and Need for Refund Mechanism: Representations from various trade and industry bodies highlighted the need for a standardized procedure to seek refunds for additional IGST paid when the export price of goods is adjusted post-export. Such adjustments can arise from linking prices to international indices or as per contractual terms. The government has responded by establishing a formal process for these refund claims.
2. Refund Process for Additional IGST:
Automated Processing for Standard Refunds: As per Rule 96 of the Rajasthan Goods and Services Tax Rules, 2017, the refund of IGST on exports is usually processed automatically by Customs without manual intervention.
Manual Application for Additional IGST: For cases involving additional IGST due to upward price revisions, exporters are required to file a refund application electronically in FORM GST RFD-01 on the common portal. This application will be processed by the jurisdictional GST officer of the exporter.
3.Eligibility and Conditions:
Minimum Refund Amount: Refunds will not be granted if the amount claimed is less than INR 1,000. Claims below this threshold will be rejected.
Time Limit for Filing Refund Claims: Refund applications must be filed within two years from the relevant date, as specified in clause (a) of Explanation (2) of Section 54 of the RGST Act. For claims where the relevant date was before the enforcement of sub-rule (1B) of Rule 89 of RGST Rules, the application can be filed within two years from the date this sub-rule came into effect.
4. Verification and Processing of Claims:
Verification of Export Invoice and Debit Note: The proper officer processing the refund claim will ensure that the exporter has reported the details of the export invoice and debit note in their FORM GSTR-1 and that the additional IGST, along with any applicable interest, has been paid in the FORM GSTR-3B return.
Refund Sanction and Payment Orders: Upon verifying the completeness and eligibility of the application, the proper officer will issue a refund sanction order in FORM GST RFD-06 and a payment order in FORM GST RFD-05 if the claim is deemed payable.
Impact on Exporters
This new procedure is set to streamline the process of claiming refunds for additional IGST, addressing a crucial gap for exporters who face price revisions post-export. The emphasis on electronic filing and jurisdictional processing is expected to enhance efficiency and clarity in the refund process.
Next Steps for Exporters:
Review Documentation: Ensure all necessary details are accurately reported in FORM GSTR-1 and FORM GSTR-3B.
Submit Refund Application: File the refund claim electronically in FORM GST RFD-01 within the stipulated time frame.
Monitor Application Status: Keep track of the application status through the common portal and coordinate with your jurisdictional GST officer if needed.
