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Inadvertently, various exporters have been mis-declaring IGST paid on export supplies as IGST paid on interstate domestic outward supplies while filing GSTR-3B. Also, in certain cases, the exporters had short paid IGST vis-à-vis their liability declared in GSTR-1. As a consequence of this mismatches in the amount of IGST paid on export goods between GSTR-1 and GSTR-3B, the GSTIN Portal failed to transmit data to Customs EDI system. As a result of this, IGST refunds could not be processed.

On the issue, considering various representation from trade and exporters, Circular No.12/2018-Customs was issued on 29th March 2018 providing detailed procedure for release of IGST refund under the above circumstances for the shipping bills filed during the period from April-2017 to March-2018. The procedure specified by the CBIC is as under:

A. CASES WHERE THERE IS NO SHORT PAYMENT:

  1. The Customs policy wing would prepare a list of exporters whose cumulative IGST amount paid against exports and interstate domestic outward supplies, for the period July’ 2017 to March’ 2018 mentioned in GSTR-3B is greater than or equal to the cumulative IGST amount indicated in GSTR-1 for the same period. Customs policy wing shall send this list to GSTN.
  2. GSTN shall send a confirmatory E-mail to these exporters regarding the transmission of records to Customs EDI system.
  3. The exporters whose refunds are processed/ sanctioned would be required to submit a certificate from Chartered Accountant before 31st October, 2018 to the Customs office at the port of export to the effect that there is no discrepancy between the IGST amount refunded on exports and the actual IGST amount paid on exports of goods for the period July’ 2017 to March’ 2018. In case there are exports from multiple ports, the exporter is at liberty to choose any of the ports of export for submission of the said certificate.
  4. A copy of the certificate shall also be submitted to the jurisdictional GST office (Central/ State). The concerned Customs zone shall provide the list of GSTINs who have not submitted the CA certificate to the Board by the 15th November 2018.
  5. Non submission of CA certificate shall affect the future IGST refunds of the exporter.
  6. The list of exporters whose refunds have been processed as above shall be sent to DG (Audit)/ DG (GST) by the Board.

B. CASES WHERE THERE IS A SHORT PAYMENT:

  1. In cases where there is a short payment of IGST i.e. cumulative IGST amount paid against exports and interstate domestic outward supplies together, for the period of July-2017 to March-2018 mentioned in GSTR-3B is less than the cumulative IGST amount indicated in GSTR-1 for the same period, the Customs policy wing would send the list of such exporters to the GSTN and all the Chief Commissioner of Customs.
  2. E-mails shall be sent by GSTN to each exporter referred in para (i) above so as to inform the exporter that their records are held up due to short payment of IGST. The E-mail shall also advise the exporters to observe the procedure under this circular.
  3. The exporters would have to make the payment of IGST equal to the short payment in GSTR 3B of subsequent months so as to ensure that the total IGST refund being claimed in the Shipping Bill/ GSTR-1 (Table 6A) is paid. The proof of payment shall be submitted to Assistant/ Deputy Commissioner of Customs in charge of port from where the exports were made. In case there are exports from multiple ports, the exporter is at liberty to choose any of the ports of export.
  4. Where the aggregate IGST refund amount for the said period is upto Rs. 10 lacs, the exporter shall submit proof of payment (self-certified copy of challans) of IGST payment to the concerned Customs office at the port of export. However, where the aggregate IGST refund amount for the said period is more than Rs. 10 lacs, the exporter shall submit proof of payment (self-certified copy of challans) of IGST to the concerned Customs office at the port of export along with a certificate from chartered Account that the shortfall amount has been liquidated.
  5. The exporter would give an undertaking they would return the refund amount in case it is found to be not due to them at a later date.
  6. The Customs zones shall compile the list of exporters (GSTIN only), who have come forward to claim refund after making requisite payment of IGST towards short paid amount and complied with other prescribed requirements.
  7. The compiled list may be forwarded to Customs policy wing, DG (Audit) and DG (GST). Customs policy wing shall forward the said list of GSTINs to GSTN. On receipt of the list of exporters from Customs policy wing, GSTN shall transmit the records of those exporters to Customs EDI system.
  8. The exporters whose refunds are processed/ sanctioned as above would be required to submit another certificate from Chartered Accountant before 31st October 2018 to the same Customs office at the port of export to the effect that there is no discrepancy between the IGST amount refunded on exports and the actual IGST amount paid on exports of goods for the period July-2017 to March-2018. A copy of the certificate shall also be submitted to the jurisdictional GST office (Central/ State). The concerned Customs zone shall provide the list of GSTINs who have not submitted the CA certificate to the Board by the 15th November 2018.
  9. Non submission of CA certificate shall affect the future IGST refunds of the exporter.

It is further provided vide the above Circular that under the circumstances where it is noticed that the IGST refund sanctioned excess or in violation of the provisions of the GST Act and/ or Rules made thereunder, the DG (Audit) wing will consider the above transactions and the information will be forwarded to the Jurisdictional GST Department for an appropriate action.

Circular No.25/2019-Customs dated 27th August 2019 was thereafter issued by the CBIC extending the scope of Circular No.12/2018-Customs dated 29th March 2018 to the Shipping Bills issued during the period from April-2018 to March-2019.

Another Circular No.04/2021-Customs dated 16.02.2021 has been issued extending the scope of Circular No.12/2018-Customs dated 29th March 2018 further for the Shipping Bills filed during the period from April-2019 to March-2021. Exporters shall note that in terms of Circular No.04/2021-Customs dated 16.02.2021, the exporters are directed to provide CA certificate evidencing that there is no discrepancy between the IGST amount refunded on exports and the actual IGST amount paid on exports of goods for the period April-2019 to March-2020 and April-2020 to March-2021 shall be furnished by 31st March 2021 and 30th October 2021, respectively.  

Reference: 

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