IGST REFUNDS - EXPORTS ROLE OF CUSTOMS

Transcription

1 IGST REFUNDS - EXPORTS ROLE OF CUSTOMS

2 BACKGROUND OF IGST REFUNDS ON EXPORTS Exports : Zero-Rated Supply: Eligible to Claim Refund As per Sec 2(23) of IGST Act: zero-rated supply shall have the meaning assigned to it in section 16; Sec 16. (1) of IGST Act : zero rated supply means any of the following supplies of goods or services or both, namely: (a) export of goods or services or both; or (b) supply of goods or services or both to a Special Economic Zone developer or a Special Economic Zone unit

3 BACKGROUND OF IGST REFUNDS ON EXPORTS Exports : Zero-Rated Supply: Eligible to Claim Refund A registered person making zero rated supply shall be eligible to claim refund under either of the following options, namely: a) he may supply goods or services or both under bond or Letter of Undertaking, subject to such conditions, safeguards and procedure as may be prescribed, without payment of integrated tax and claim refund of unutilised input tax credit; or b) he may supply goods or services or both, subject to such conditions, safeguards and procedure as may be prescribed, on payment of integrated tax and claim refund of such tax paid on goods or services or both supplied in accordance with the provisions of section 54 of the Central Goods and Services Tax Act or the rules made thereunder. Every person making claim of refund on account of zero rated supplies has two options. Either he can export under Bond/LUT and claim refund of accumulated Input Tax Credit or he may export on payment of integrated tax and claim refund of thereof as per the provisions of Section 54 of CGST Act, 2017.

4 BACKGROUND OF IGST REFUNDS ON EXPORTS

5 PROCEDURE OF EXPORT UNDER OPTION 1: The detailed Procedures are prescribed in Rule 96A of CGST Rules.

6 PROCEDURE UNDER OPTION 1:

7 OPTION 2: EXPORT ON PAYMENT OF TAX CLAIM IGST REFUND In the case of refund of IGST paid on exports: Upon receipt of information regarding furnishing of valid return in Form GSTR-3 by the exporter from the common portal, the Customs shall process the claim for refund and an amount equal to the IGST paid in respect of each shipping bill shall be credited to the bank account of the exporter.

8 PROCEDURE OF CLAIMING IGST REFUNDS ON EXPORTS UNDER OPTION 2 As per Rule 96 (1) of CGST Rules, the shipping bill filed by an exporter shall be deemed to be an application for refund of integrated tax paid on the goods exported out of India and such application shall be deemed to have been filed only when:- (a) the person in charge of the conveyance carrying the export goods duly files an export manifest or an export report covering the number and the date of shipping bills or bills of export; and (b) the applicant has furnished a valid return in FORM GSTR-3or FORM GSTR-3B, as the case may be; Contd.

9 Contd. PROCEDURE OF CLAIMING IGST REFUNDS ON EXPORTS UNDER OPTION 2 The details of the relevant export invoices contained in FORM GSTR-1 shall be transmitted electronically by the common portal to the system designated by the Customs and the said system shall electronically transmit to the common portal, a confirmation that the goods covered by the said invoices have been exported out of India. (Rule 96 (2) of CGST Rules) Upon the receipt of the information regarding the furnishing of a valid return in FORM GSTR-3or FORM GSTR-3B, as the case may be from the common portal, the system designated by the Customs shall process the claim for refund and an amount equal to the integrated tax paid in respect of each shipping bill or bill of export shall be electronically credited to the bank account of the applicant mentioned in his registration particulars and as intimated to the Customs authorities. (Rule 96 (3) of CGST Rules)

10 IGST REFUNDS ON EXPORTS GUIDELINES GIVEN IN INSTRUCTION NO 15/2017-CUSTOMS Export General Manifest : Filing of correct EGM is a must for treating shipping bill or bill of export as a Refund Claim. Exporters may be advised that they should follow up with their carriers to ensure that correct EGM/export reports are filed in a timely manner.

11 IGST REFUNDS ON EXPORTS GUIDELINES GIVEN IN INSTRUCTION NO 15/2017-CUSTOMS Details of Export Supplies in Table 6A of GSTR-1 The details of zero rated supplies declared in Table 6A of return in Form GSTR-1 are matched electronically with the corresponding details available in Customs Systems as per details provided in shipping bills/ bill of export. Thus exporters must file their GSTR-1 very carefully to ensure that all relevant details match. For their convenience, the details available in the Customs System have been made available for viewing in their ICEGATE login. For month of August 2017 and subsequent months. facility of filing GSTR- I has not been made available by GSTN at present. In order to facilitate processing of refunds, GSTN is making available a separate utility for filing details in Table 6A of GSTR-1 on the GSTN Web portal. Exporters may be advised to submit the requisite details once GSTN develops the utility.

12 IGST REFUNDS ON EXPORTS GUIDELINES GIVEN IN INSTRUCTION NO 15/2017-CUSTOMS Valid return in Form GSTR-3 or Form GSTR-3B Filing of valid return in GSTR-3 or GSTR-3B is another pre- condition for considering shipping bill/ Bill of export as claim for refund. Exporters may be advised that they must file these returns expeditiously without waiting for the last date. to ensure that their refund is processed in a timely manner.

13 IGST REFUNDS ON EXPORTS GUIDELINES GIVEN IN INSTRUCTION NO 15/2017-CUSTOMS Bank Account Details: As per Rule 96 of CGST Rules 2017, the refund is to be credited in the bank account of the applicant mentioned in his registration particulars. As a practice, exporters have been declaring details of bank account to Customs for the purpose of drawback etc. There is a possibility that bank account details available with Customs do not match with those declared in the GST registration form. In order to ensure smooth processing and payment of refund of IGST paid on exported goods, it has been decided that said refund amount shall be credited to the bank account of the exporter registered with Customs even if it is different from the bank account of the applicant mentioned in his registration particulars. However, exporters may be advised to either change the bank account declared to Customs to align it with their GST registration particulars or add the account declared with Customs in their GST registration details. Contd.

14 IGST REFUNDS ON EXPORTS GUIDELINES GIVEN IN INSTRUCTION NO 15/2017-CUSTOMS Contd.. Further, as the refund payments are being routed through the PFMS portal, the bank account details need to be verified and validated by PFMS. The status of validation of bank account with PFMS is available in ICES. Exporters may be advised that if the account has not been validated by PFMS, they must get their details corrected in the Customs system so that their bank account gets validated by PFMS. Exporters are also advised not to change their bank account details frequently to avoid delay in refund payment.

15 IGST REFUNDS ON EXPORTS GUIDELINES GIVEN IN INSTRUCTION NO 15/2017-CUSTOMS

16 WHAT ARE RETURNS GSTR 1, GSTR 3 & GSTR 3B GSTR 1 GSTR 1 contains details of all the sales transactions of a registered dealer for a month. The GSTR 1 filed by a registered dealer is used by the government to auto populate GSTR 3 for the dealer and GSTR 2A for dealers to whom supplies have been made. Every registered person is required to file GSTR 1 irrespective of whether there are any transactions during the month or not. GSTR 1 once filed cannot be revised. Any mistake made in the return can be revised in the next months return. It means that if a mistake is made in September GSTR 1, rectification for the same can be made in October s GSTR 1. On the GST Portal, a separate tab called Table 6A of Form GSTR1 has been introduced recently to help exporters claim GST refund.

17 WHAT ARE RETURNS GSTR 1, GSTR 3 & GSTR 3B What is Table 6A of Form GSTR1? Table 6A of Form GSTR1 has been introduced to help Exporters claim GST refund on goods exported out of India. The full cycle of GST return filing is yet to be completed and the due dates for July GSTR 2 and GSTR 3 returns has recently been extended. Only by filing GSTR 1 return with details of all exports made during the month, exporters would be able to claim GST refund on exports. GSTR 3B return so far filed by all taxpayers every month does not have invoice level data. Also, since the GSTR 1 were not filed, exporters were finding it difficult to claim GST refunds. Hence, to quicken GST refund for exports, the Government has introduced Table 6A of Form GSTR 1. Who should file Table 6A of Form GSTR1? Table 6A of Form GSTR1 must be filed by any person who was involved in exporting goods from India to claim GST refund. Once, the details of export invoices are filed on the GST Portal under Table 6A, the details will be matched with the shipping bill filed with the Customs Department and amount mentioned in GSTR 3B return. If all the information matches, then GST refund on exports will be quickly processed by the Government.

18 HOW TO FILE A GST REFUND CLAIM FOR EXPORTS Step 1: Access GST Portal Prepare GST Returns Tab

19 HOW TO FILE A GST REFUND CLAIM FOR EXPORTS Step 2: Select Add Details Select Add Details to begin entering export invoice details.

20 HOW TO FILE A GST REFUND CLAIM FOR EXPORTS Step 3: Enter Details of Export Invoice Enter the details of each of the export invoice. Input information like invoice number, invoice date, port code, shipping bill number / bill of export number, shipping bill date, invoice value, GST payment status and amount of tax. Ensure that all the information provided in this form matches the shipping bill or bill of export filed with the Customs Department. Any mismatch in details can lead to a delay in processing of the GST refund.

21 HOW TO FILE A GST REFUND CLAIM FOR EXPORTS Step 4: File GSTR1E Return Once all the details of all export invoices in a month are uploaded, click on File Return. Before filing this return, ensure that all export invoices are uploaded. There is no provision for correcting or refiling this return at the moment

22 HOW TO FILE A GST REFUND CLAIM FOR EXPORTS Step 5: Submit with Digital Signature Once the file return is clicked, on the next page, select the authorised signatory from the drop-down list and submit the return with digital signature. The return will be submitted only on filing the GSTR1E return with digital signature.

23 SUPPLIES TO SEZ

24 WHAT ARE RETURNS GSTR 1, GSTR 3 & GSTR 3B What is GSTR 3? GSTR-3 is a monthly return with the summarized details of sales, purchases, sales during the month along with the amount of GST liability. This return is auto-generated pulling information from GSTR-1 and GSTR-2. GSTR-3 will show the amount of GST liability for the month. The taxpayer must pay the tax and file the return Who should file GSTR-3? Every registered person is required to file GSTR-3 irrespective of whether there are any transactions during the month or not. How to revise GSTR-3? GSTR-3 once filed cannot be revised. Any mistake made in the return can be revised in the next month s GSTR- 1 and GSTR-2 returns. Direct revision in GSTR-3 is not possible as GSTR-3 is auto-generated without provision for editing.

25 WHAT ARE RETURNS GSTR 1, GSTR 3 & GSTR 3B How will GSTR-3 and GSTR-3B be reconciled? GSTR 3B is a simple return form introduced by the CBEC for the month of July and August GSTR-3 will also have to be filed for July & August 2017.( Extended to March 2018) On filing the GSTR 3, if actual liabilities are different from those declared in GSTR 3B, the system will update the (difference) between GSTR 3B and GSTR 3 automatically. In case, actual liabilities in GSTR-3 are higher than those declared and paid with GSTR-3B, you will have to pay the extra amount tax along with interest on the extra amount. GSTR-3 must be filed only after paying entire tax liability otherwise it will not be treated as valid return.

26 CBEC CIRCULAR 42/2017- CUS DATED 07/11/2017 CBEC Circular 42/2017 major highlights In cases where the exporter has filed GSTR 3B and the information furnished by the exporters in the GSTR 1 and GSTR 3B is matching with the details filed by them in Shipping bills, the refunds have already been disbursed. But there are many cases where the refund of IGST could not be done due to errors in the EGM /GSTR 1 return/shipping Bill. The analysis of the common errors that are hindering the disbursal of IGST refund, and decisions taken to address such errors are as follows: A. IGST refunds for the exports of goods in the month of July, 2017: i) Incorrect SB number in GSTR 1 - There are cases where the shipping bill number quoted in GSTR 1 either does not exist or it pertains to another exporter. In respect of these claims, the only way out is to amend the GSTR 1 (Amendments to taxable outward supply details furnished in returns for earlier tax periods) and enter the correct shipping bill number. In these cases, the amendments for information furnished in GSTR 1 for July 2017 need to be filed in Table 9A of GSTR 1 for August GSTN has been asked to provide for immediate implementation of this Table so that all such claims can be processed once amendment is filed.

27 CBEC CIRCULAR 42/2017- CUS DATED 07/11/2017 CBEC Circular 42/2017 major highlights contd. A. IGST refunds for the exports of goods in the month of July, 2017: ii) Invoice number and IGST paid amount mis-match Analysis of data revealed that exporters have quoted different invoice numbers for GST and Customs purposes. Also, IGST paid amount indicated in GSTR 1 is not tallying with IGST paid amount indicated in shipping bill. As the same transaction is being reported under GST Act and under Customs Act, the exporters may take care to ensure the details of invoice, such as Invoice number, IGST paid etc, under GSTR 1 and shipping bill match with each other. iii) EGM Error Due to either mismatch in information furnished in Export General Manifest (EGM) vis-a-vis shipping bill or nonfiling of EGM in certain cases, the compliance of 'exported out of India' requirement in Rule 96 (2) of Central Goods and Services Tax (CGST) Rules, 2017 remained unfulfilled. It is also noticed that Gateway EGM in case of many ICD's Shipping Bills have been manually filed, due to which the system is unable to match the EGM details. Hence, it is to be ensured that all the shipping lines operating in ICDs/Gateway ports file EGM online. All ICDs and Gateway ports have already been instructed to ensure that shipping lines file supplementary EGM online for the consignments exported in July 2017 by 31st October. For subsequent months also, the ICDs must ensure that the shipping lines invariably file the Gateway EGM online. In cases where supplementary EGM have been filed successfully, refunds are already being given.

28 CBEC CIRCULAR 42/2017- CUS DATED 07/11/2017 CBEC Circular 42/2017 major highlights contd. A. IGST refunds for the exports of goods in the month of July, 2017: iv) Wrong Bank Account given to Customs In some cases, bank account details available with Customs have been invalidated by PFMS. Reports on such accounts / IECs have been provided to the Commissionerates by the Directorate of Systems in ICES and by . Exporters may be advised that if the account has not been validated by PFMS, they must get their details corrected in the EDI system. Exporters are also advised not to change their bank account details frequently so as to avoid delay in refund payment. B. IGST Refunds for the export of goods in the month of August, 2017: GSTN has provided the utility to declare Table 6A in GSTR1 for exporters to fill in information related to Zero Rated Supplies. Once exporters file Table 6A, it would be possible to sanction refunds for the exports made in August Thus Public/Trade notices may be issued emphasizing the need to fill Table 6A online by exporters to claim refunds against exports made in August Exporters have already been provided an option to view their Shipping Bill data online on ICEGATE website, so that they can ensure filing of their Table 6A without any error. All necessary steps may be taken to make exporters aware that the common errors that hindered disbursal of IGST refunds in July are not repeated in subsequent months.

29 LATEST UPDATE 23rd GST Council Meet on 10th November 2017 GSTR-3B has been extended to March 2018 All businesses to file GSTR-3B by 20th of next month till March All businesses to file GSTR-1and GSTR-3B till March GSTR-2 and GSTR-3filing dates for July 2017 to March 2018 will be worked out later by a Committee of Officers

30 LATEST UPDATE Turnover under Rs 1.5 Cr to file quarterly GSTR-1 Period (Quarterly) Due dates July- Sept 31st Dec 2017 Oct- Dec 15th Feb 2018 Jan- Mar 30th April 2018

31 LATEST UPDATE Turnover above Rs 1.5 Cr to file monthly GSTR-1 Period Dates July to Oct 31st Dec 2017 Nov 10th Jan 2018 Dec 10th Feb 2018 Jan 10th Mar 2018 Feb 10th Apr 2018 March 10th May 2018

32 DUE DATES OF FILING GSTR-3B Month Last Date for filing GSTR-3B August th September 2017 September th October 2017 October th November 2017 November th December 2017 December th January 2018 January th February 2018 February th March 2018 March th April 2018 Tax liability of GSTR-3B must be paid by the last date of filing for that month.

33 LATE FEE & INTEREST Interest is 18% per annum. It has to be calculated by the tax payer on the amount of outstanding tax to be paid. Time period will be from the next day of filing to the date of payment. Late fee is Rs. 100 per day per Act. So it is 100 under CGST & 100 under SGST. Total will be Rs. 200/day. Maximum is Rs. 5,000. There is no late fee on IGST. For delayed filing of NIL returns, late fee reduced from Rs 200 per day to Rs 20 per day. Late fees for GSTR-3B of July, Aug and Sept waived. Any late fees paid for these months will be credited back in Electronic Cash Ledger under Tax and can be utilized to make GST payments.

34 LATEST UPDATE Timelines for filing of GSTR-2 and GSTR-3 - For July to March 2018 to be worked out by Committee of Officers. However, subsequent month filing of GSTR-1 will not be impacted.

35 THANK YOU!!!!