The Central Board of Indirect Taxes (CBIC) with a view to addressing the glitches in the processing of refund under Goods and Services Tax (GST) to the exporters, provided an interim solution subject to undertakings/ submission of certificates of Chartered Accountants by the exporters.
As per the circular, the major hindrance to process the refund claim is that the GSTN could not transmit data to Customs EDI system. Though a validation has been introduced in the GSTN system, the same found failed in a number of cases.
The Board further identified that the exporters have committed mistakes while filing GSTR-1 and GSTR-3B. It was observed that the exporters have inadvertently misdeclared IGST paid on export supplies as IGST paid on interstate domestic outward supplies while filing GSTR-3B. The exporters have also in certain cases short paid IGST vis-à-vis their liability declared in GSTR1. As a result of these mismatches in the amount of IGST paid on export goods between GSTR-1 and GSTR-3B, the transmission of records from GSTN to Customs EDI system has not happened and consequently, IGST refunds could not be processed. The problem is compounded by the fact that the facility to adjust GSTR-3B in subsequent months is not available in all cases.
The following procedure has been laid down by the Board to address the above issues;
In cases where there is no short payment, 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. The GSTN would then send a confirmation mail to the exporters.
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. 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. Non-submission of CA certificate shall affect the future IGST refunds of the exporter.
In cases where there is short payment, the Customs policy wing would send the list of such exporters to the GSTN and all the Chief Commissioner of Customs. 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 a short payment of IGST. The email shall also advise the exporters to observe the procedure under this circular.
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 a 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.
A proof of payment shall be submitted in a case where the aggregate IGST refund amount for the said period is up to Rs. 10 lakhs.
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.
The exporters would be subjected to a post-refund audit under the GST law. DG (Audit) shall include the above-referred GSTINs for conducting Audit under the GST law. The inclusion of IGST refund aspects in Audit Plan of those units may be ensured by DG (Audit).
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