Circular providing alternative mechanism in the cases of Invoice mis-matching for Refund of IGST on Export

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The Central Board of Excise and Customs vide Circular No. 05/2018-Customs dated February 23, 2018 has prescribed alternative mechanism for refund of IGST paid on export in invoice mis-match cases.

  1. The pre-requisites and precautions that need to be taken for successful processing of refund claims are as follows:
    • Proper filing of GSTR-3B
    • Filing of GSTR 1 or Table 6A for exports made with correct details such as Invoice number, Taxable value, IGST paid, Shipping Bill number, Shipping Date and Port Code. E-mails have been sent to exporters asking them to correct their records through amendment process of GSTR 1 i.e through Table 9 of GSTR 1 of the following month.
    • The aggregate IGST paid amount claimed in GSTR 1 or Table 6A should not be greater than the IGST paid amount indicated in Table 3.1(b) of GSTR 3B of the corresponding month.
    • Exporters may be advised to use Table 9 of GSTR 1 of the following month to amend the records of previous month so as to take care of issues mentioned in paras (ii) and (iii) above.
    • The records (i.e GSTR 1 or Table 6A) which have been forwarded by GSTN to Customs after validations mentioned at (ii) and (iii) above are processed by the Customs EDI system.
      • The major errors that are committed by the exporters are:
        • Incorrect Shipping bill numbers in GSTR 1
        • GSTIN declared in the shipping bill does not match with the GSTIN used to file the corresponding GST Returns.
        • The most common error hampering refund is due to mismatch of invoice number, taxable value and IGST paid in the Shipping Bill vis-à-vis the same details mentioned in GSTR 1 / Table 6A which is the most common error hampering refund.

    Another reason attributable to carriers is the non-filing or incorrect filing of electronic Export General Manifest (EGM).

    • Exporters may be advised to track the refund status and errors pertaining to their shipping bills on the ICEGATE website. Once the registration is obtained, the exporters can check the status of IGST refunds associated with their exports and the corresponding error message, if any.
    • This error of Invoice mis-match is because of the fact that exporters are using two sets of invoices, one invoice for GST and another invoice for Customs which is resulting in mismatch of invoice numbers, including mis-match in taxable value and IGST paid in those invoices.
  2. An alternative mechanism to give exporters an opportunity to rectify such errors committed in the initial stages. This envisages an officer interface on the Customs EDI System through which a Customs officer can verify the information furnished in GSTN and Customs EDI system and sanction refund in those cases where invoice details provided in GSTR 1/ Table 6A are correct though the said details provided in the shipping bill were at variance. It is pertinent to note that refund claims would be processed in only those cases where the error code is mentioned as SB005. The procedure for processing of IGST refund claims in these cases would be as follows:
    • The exporter shall provide a concordance table indicating mapping between GST invoices and corresponding Shipping Bill invoices, as annexed in support of the refund claim to the designated officer in the Custom house or a scanned copy of the same to dedicated email address of Customs location from where exports took place.
    • Customs EDI system shall display list of all the invoices pertaining to such SBs vis-a-vis the invoice data received from GSTN. The officer shall verify the following:
      • Duly certified concordance table submitted by the exporter;
      • IGST taxable value and IGST amount declared in the Shipping Bill.
      • IGST details declared in the Shipping Bill should be in proportion to the goods actually exported.
    • After determining the correct refund amount, the officer need to enter the same into the Customs EDI system
    • Once all the invoices pertaining to Shipping Bill are verified by the officer, the system shall calculate the scroll amount against a shipping bill, after subtracting the drawback amount for each invoice where applicable, and display the refund amount to the officer for approval.
    • Invoices in any particular GSTR 1 where refund is sanctioned shall be disabled in the system to prevent refund against same invoice in future.
    • Once refund is sanctioned by the officer, the shipping bills would be available for generating scroll as per normal process.
  3. In order to ensure smooth operation of the prescribed procedure, Custom Houses may open a dedicated cell and e-mail address for the purpose of IGST refund and give wide publicity.
  4. This procedure is available only for Shipping Bills filed till 31st December 2017.