Export Refund

Eligibility Criteria to Claim GST Refunds on Export

Any registered taxable person, besides Input Service Distributor (ISD), Compounding Taxpayer, TDS Deductor and TCS Collector, can claim a refund for the taxes paid on exports, if the supplied goods and/or services fulfil the following conditions:

• Supplier is located in India.
• Recipient and the place of supply are located outside India.
• Payment for such service has been received by the supplier in convertible foreign exchange.
• Supplier of service and the recipient of service are not merely establishments of a distinct person.

Exporting Goods and Services under GST

In order to avail the option of export without payment of IGST, the registered exporter is required to furnish a bond or Letter of Undertaking (LUT) prior to the export. The issuance of LUT validates the export process, establishing the export of goods within three months 15 days from the invoice date, while the payment for the same (in foreign currency) will be received within one year 15 days of the invoice date.

The exporter is required to submit the bond, supported by a bank guarantee of an amount not exceeding 15 per cent of the bond amount on a non-judicial stamp paper for each export. The validity of a LUT is for one year and is to be submitted on the company letterhead.

GST Refund Process for Exporters

An exporter can claim IGST refund for export as per one of the two options given below:

• The supply goods and/or services is done under bond or LUT, without payment of IGST. In such scenario, the exporter can claim a GST refunds on export of the unutilized ITC available for CGST, SGST and IGST
• The supply goods and/or services is done as per the prescribed procedure, along with the IGST payment. In such scenario, the exporter can claim a refund for the IGST paid on the supply.

Furthermore, the exporters monthly GST returns should show export details, as given below:

• Form GSTR 1: Export details in Table 6A of GSTR-1, along with “shipping bill” details of the IGST paid.
• Form GSTR-3B: Valid details, relevant to the export period.

Upon successful filing of these forms, the GSTN portal shares the received export details with the ICEGATE. For which, the details provided in attached documents and GSTR 1 is validated by the ICEGate system and the refund process is initiated.

As per the IGST Act, 90% of refund processing is done within 7 days of filing refund application. The acknowledgement of the same is shared with refund payment is directly done to exporters the refund payment is credited to the account of the taxpayers, the ICEGATE system will provide the payment information with the GST Portal will send the details through SMS and e-mail with the taxpayers.