The Central Board of Indirect Taxes and Customs ( CBIC ) has released Circular No. 226/20/2024-GST, establishing a detailed mechanism for the refund of additional Integrated Goods and Services Tax ( IGST ) paid due to upward revisions in the prices of exported goods post-export.
Background and Need for the Mechanism
Exporters often face situations where the prices of their goods need to be adjusted after export due to various factors such as linkage to international indices or contractual terms. When prices are revised upwards post-export, exporters are required to pay additional IGST along with applicable interest.
However, until now, there was no structured procedure for exporters to claim refunds for the additional IGST paid. This new circular aims to address this gap and ensure uniform implementation across all field formations.
Procedure for Filing Refund Claims
Exporters can file their refund applications electronically using FORM GST RFD-01 on the common portal.
A separate category for these refunds is being developed. In the interim, exporters should file under the category “Any other” with remarks specifying the nature of the refund.
The application must include relevant documents such as shipping bills, original invoices, debit notes, proof of additional IGST payment, and proof of receipt of additional foreign exchange.
Required documents include copies of shipping bills, original and supplementary invoices, contracts indicating the need for price revision, proof of additional IGST payment, and a certificate from a practising chartered accountant or cost accountant.
Refund claims will only be processed if the amount exceeds one thousand rupees, as per Section 54 of the CGST Act.
Applications must be filed within two years from the relevant date as per section 54 of the CGST Act. For cases where the relevant date predates this circular, the filing period extends to two years from the circular’s implementation date.
Processing and Verification
The jurisdictional GST officer will process refund applications based on the submitted documents and validate details such as shipping bills, IGST amounts, and previously sanctioned refunds. The officer will also ensure that the exporter has correctly reported and paid the additional IGST in their returns.
Downward Price Revisions: In cases where there is a downward revision in prices post-export, exporters must refund the excess IGST received along with applicable interest.
For further details, stakeholders are encouraged to refer to Circular No. 226/20/2024-GST dated July 11, 2024 by clicking the blue button below.
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