The Goods and Services Tax (GST) return filing system was anticipated to streamline regular return submissions and Input Tax Credit (ITC) tracking. For details on how export reporting differs between the current and proposed new return systems, readers can refer to articles on export comparisons. This article thoroughly examines the process for claiming GST refunds on both goods and services exports. It specifically focuses on GST refund claims for exports under the new GST returns system, which was initially slated for implementation in April 2020 but has since been put on hold. As per the latest update, the GST authorities have withdrawn the new GST return system, meaning the existing GSTR-1 and GSTR-3B filing framework remains applicable.

Overview of GST Refund Process for Exports Under GST

In GST law, export supplies are categorized as zero-rated supplies, implying that the effective tax rate on such supplies is zero. Deemed exports also fall under this zero-rated classification. The declaration process for exports varies slightly depending on the chosen method.

GST Refund Process for Exports Under the Current Return Filing

Export with Payment of IGST

Exporters are eligible to claim a refund of the Integrated Goods and Services Tax (IGST) paid at the time of export. For goods, the GST refund process begins with the shipping bill, a primary document. Both the shipping bill and other export-related documents must be filed on the Indian Customs Electronic Commerce Gateway (ICEGATE).

GSTR-1

The GST refund process continues on the GST portal through Form GSTR-1. Export details are reported in Table ‘6A – Exports Invoices’. The required information includes:

• Invoice date
• Port code
• Shipping bill number/bill of export number
• Shipping bill date/bill of export date
• Total invoice value and taxable value
• GST payment (select ‘With Payment of Tax’)
• Eligibility for tax at a differential percentage, if government notified
• Auto-populated tax amount, which can be edited

It is crucial to ensure that all details provided in this table align with those in the shipping bill.

For export of services, fields 2, 3, and 4 should be left blank.

In the case of deemed exports, the invoice is uploaded as a standard B2B invoice in Tables 4A, 4B, 4C, 6B, 6C – B2B invoices. When entering invoice details, the relevant checkbox for ‘Deemed exports’, ‘SEZ Supplies without payment’, or ‘Sale from bonded warehouse’ should be selected.

GSTR-3B

Subsequently, the GST refund process involves declarations in GSTR-3B. The relevant amounts must be entered in Table 3.1(b) – ‘Outward taxable supplies (zero-rated)’. The IGST amount reported here must be equal to or greater than the total IGST declared in Table 6A of the corresponding GSTR-1.

Form GST RFD-01

The filing of Form RFD-01 (an entirely online process) is necessary in specific situations:

(1) Export of Goods

For goods exported with tax payment, a separate refund application is not required, as the shipping bill itself serves as the refund application. The details submitted in Form GSTR-1 are cross-referenced with the shipping bill data filed on ICEGATE. ICEGATE then processes the refund and credits the amount to the bank account specified by the taxpayer on its portal.

(2) Export of Services

For service exports, a distinct refund application in RFD-01 is mandatory. Taxpayers must log in to the GST portal and navigate to Services > Refunds > Application for Refund > Export of Services with payment of tax > RFD-01. Details pertaining to service exports need to be uploaded using the offline utility. The refund amount and the bank account for credit must also be provided. Upon successful filing, an Application Reference Number (ARN) is generated for tracking the refund status.

Export Without Payment of IGST

When exporting goods without tax payment, the exporter can use either a Letter of Undertaking (LUT) or a bond. In such cases, any unutilized Input Tax Credit (ITC) accumulated on inputs or input services becomes eligible for a refund. The LUT option is restricted to specific exporters who meet prescribed criteria. The procedure is similar to that for service exports.

Form GST RFD-11

The LUT can be filed using Form GST RFD-11 on the common portal by accessing Services > User Services > Furnish Letter of Undertaking (LUT). Required details are completed and uploaded with a digital signature, following the LUT filing procedure. For a bond, it must be manually executed on stamp paper, signed, and submitted to the jurisdictional Deputy/Assistant Commissioner along with relevant documents like Form RFD-11 on the taxpayer’s letterhead, a bank guarantee, and an authority letter. The Commissioner will issue a signed acknowledgment after inspecting the documents.

Form GST RFD-01

Similar to the process for tax-paid exports, taxpayers use this form. Details concerning ITC attributable to zero-rated supply must be entered and submitted online via RFD-01. The taxpayer should confirm that RFD-11 has been filed, upload relevant documents, and affix a digital signature to submit the form, which generates an ARN for tracking. The invoice declaration process in Form GSTR-1 is identical, except that ‘Without payment of tax’ must be selected in the GST Payment field.

GST Refund Process for Exports Under the New Return Filing

The GST refund process for exports and the refund application forms RFD-01 and RFD-11 were intended to remain unchanged under the proposed new GST return system. However, there was a planned modification in how export details are reported in the return forms. Below are the forms designed for reporting export refund details under the new system:

Form ANX-1

Under the new GST returns, the GST refund process for exports would have commenced with ANX-1. In this form, export invoice details were to be uploaded in Table ‘3C – Exports with payment of tax’ and Table ‘3D – Exports without payment of tax’, depending on whether IGST was paid on the supply. For a given tax period, all export invoices with available shipping bills/bills of export up to the filing date (the 20th of the next month for monthly filers or the 25th of the month following the quarter for quarterly filers) were to be reported. Any remaining invoices would be reported in the subsequent tax period. The details required in this field would have included:

• Document particulars (invoice, credit or debit note, serial number, date, value)
• HSN code (at the six-digit level)
• Tax rate and taxable value
• Applicable tax amounts (if the export was made with tax payment)
• Shipping bill/bill of export details (number and date)

Once implemented, a dedicated feature would have allowed updates to shipping bill/bill of export details even after the return filing date of the relevant tax period, significantly automating the GST refund process for exports.

FORM RET-1

The GST refund process for exports under the new GST returns system would have continued with declarations in RET-1. The value and tax amounts related to exports declared in ANX-1 would have been auto-populated in Table 3A (row 3 and 4) for outward supplies. Taxpayers would only need to verify these figures, eliminating the need for re-entry.

New Amendment Return Introduced

Amendments to export details, whether with or without IGST payment, could have been made in ANX-1A. This form would amend the original ANX-1 submitted for a tax period (monthly or quarterly) by referencing the initial details. These amendments would then auto-populate to RET-1A. Importantly, amendments were not allowed for export documents where a refund had already been successfully claimed. Conversely, any export invoice details missed in prior periods could be reported in the current period’s ANX-1.

Has the GST Refund Process for Exports Become Easier?

A notable change in the proposed new system was the auto-population of details from ANX-1 into RET-1, a contrast to the current/old system where GSTR-1 reporting is separate from GSTR-3B. An integrated facility was also planned to import shipping bill and bill of entry details directly from ICEGATE to the GST portal for exports and imports. This manual reporting of documents is a temporary measure, as the new GST system, once implemented, would have automated the population of figures directly from the ICEGATE database into the relevant tables in forms ANX-1 and ANX-2. No changes were observed in the process of applying for refunds via RFD-01. For exported goods, the shipping bill remains the deemed application for a refund under both the current and proposed new return filing systems. However, quarterly return filers might experience longer waiting periods for their refunds to be processed. Overall, the impact of reporting exports and claiming refunds under the new return filing system, although minor, was expected to make the process easier.