Further, IGST refund is dealt by GST law, hence drawback and IGST refund operates independently . The contents of this article are solely for informational purpose. In In terms of Section 16 of the IGST Act, a registered taxable person shall have the option either to export goods/services without payment of IGST under bond or letter of undertaking and claim refund of ITC or he can export goods/services on payment of … The rejection of the IGST refund was automatically done by the system as a higher drawback was claimed. Held that relying on the decision of this court in case of G.Next Power Corp vs Union of India, the refund is allowed after deduction of the amount of Higher Duty Drawback from the refund amount claimed. As per the policy In the 'Special Refund and Drawback Disposal Drive', the CBIC officers have cleared over 1.07 lakh Goods and Services Tax and IGST refund claims worth Rs 9,818.12 crore. In the 'Special Refund and Drawback Disposal Drive', the CBIC officers have cleared over 1.07 lakh Goods and Services Tax and IGST refund claims worth Rs 9,818.12 crore. It does not constitute professional advice or recommendation of firm. No IGST refund to exporters if initially claimed benefit of higher drawback or where higher rate and lower rate were identical- CBIC. But they were not knowing it. Dear Sir, Yes, you can very well claim GST Refund but subject to following conditions and as under, 1. The legal provisions related to Drawback claims are as under: 2.1 Notes and condition (11) of Notf. 9 Oct. 2018, Sub: Cases where IGST refunds have not been granted due to claiming higher rate of drawback OR where higher rate and lower rate were identical. However, the same Leave your Name, email, Phone number along with what you are looking for in message box or you can call us at 011-41715118, Copyright (c) 2014-2020 | All Right Reserved | VJM & Associates LLP, Can IGST Refund be seek, where Higher drawback has been claimed on Exports, 405-406, 4th Floor, Raja House, Nehru Place, New Delhi - 110019, Financial Structuring & Restructuring Services, CLARIFICATION ON ISSUES RELATING TO REFUND, RoDTEP (Remission of Duties and Taxes on Exported Products) | Applicable w.e.f. The Taxpayer is entitled to refund of IGST Where exporters avail such option and provide a declaration while claiming the higher rate of drawback, it would not be justified allowing exporters to avail IGST refund after initially claiming the benefit of higher drawback. Refund of excess duty drawback is a unilateral action: Refund of the differential duty drawback by the Taxpayer is a unilateral act by the Taxpayer not recognized under the law. Introduction: IGST refund inspite of duty drawback on higher rate. Read more about 'IGST paid on imported inputs is excluded in definition of duty drawback' on Business Standard. Drawback Center Locations; Drawback Reminder for Manual Filers; Publication/Forms We should get the options to refund the drawback amount along with interest to the government and to claim refund of the IGST. Taxpayer is a Cotton Ginning Mill, engaged the business of procuring raw cotton Any resolution of the issue? in our plastic product, DBK rate is 1.8% (Rs. from farmers, ginning the same, pressing the same, carrying out necessary Blog » Goods and Service Tax » GST Refund » Can IGST Refund be seek, where Higher drawback has been claimed on Exports, Gujarat Why so short notice. relevant export details in the monthly returns in Form GSTR-3B. Despite the repeated follow-ups, the GST 01.10.2017. Ans. We are exporting goods to USA without payment of IGST after GST implementation. As per the regular practice of CHA, they have filled shipping bill with higher rate of drawback. (B) Duty Drawback Scheme No. The Shipping Line had generated No IGST refund – No refund of output GST paid on the final export product if import of inputs against AA has happened using exemption Several exporters were oblivious to these clauses, and have been executing imports considering IGST is exempted if an export obligation is already met. Totally wrong practice done by govt and CBIC. paid on goods exported to Bangladesh even if duty drawback was claimed. Actually an opportunity should be given to pay back higher drawback amount with interest to avail refund of GST. 450/ 119/2017-Cus IV Government of India Ministry of Finance Department of Revenue (Central Board of Indirect Taxes & Customs) Room No. Circulars of CBIC binding on GST authorities: Circulars of the CBIC are binding on the GST authorities and hence, the GST authorities could not take a different stance than what was directed to be followed by the CBIC. Gujarat HC directs Revenue to “immediately sanction” IGST refund on export of Rope Making Machine [HSN Code 84794000] i.e. The Commerce Ministry has taken note of exporters’ complaints that the input duty refund under the duty drawback scheme claimed by some last year was much lower than the IGST … Exporters have to provide details of GST Invoice in the Shipping Bill. However, it may apply certain conditions such as no input tax credit of CGST/IGST when claimed, no refund of IGST paid on export goods when claimed and no CENVAT credit when carried forward. The customs duty and interest … Because relevant circulars were not brought to their notice either by their GST advisers or Shipping Agents. However, decision taken by the Government of India, exporters availing higher rate of duty For exports during this period, exporters can claim higher rate of duty drawback (composite AIR) subject to conditions that no input tax credit of CGST/IGST is claimed, no refund of IGST paid on export goods is claimed and no CENVAT credit is carried forward. DISCLAIMER: The views expressed are strictly of the author and VJM & Associates LLP. Happy to Share for the benefit of all, that today in the matter of Petitioner is M/s Precot Meridien Limited. High Court rules that claim of higher rate of duty drawback is not a valid This facility is available for all registered persons except those registered under TDS, TCS and Non-resident Tax payers (NRTP). Otherwise, for just 1.5% to 2% drawback amount, we will loose the 18% IGST. While the intention of the CBIC and GST authorities by applying the provisions of the Circular about IGST Refund where Higher drawback claimed on Exports was to ensure that no exporter is doubly benefitted for the same transaction, the same does not have authority under the existing provisions of GST law. Drawback & ROSL amount automatically credited to our bank account. The Board has observed that – Exporters had availed the option to take drawback at higher rate in place of IGST refund out of their own volition. of the IGST refund and higher duty drawback. the exported goods. Where the drawback rates are the same, it represents only the Customs elements, which did not get subsumed in the GST and thus, the writapplicant cannot be said to have availed double benefit i.e. 229 A, North Block Introduction. Drawback is the refund of certain duties, internal revenue taxes and certain fees collected upon the importation of goods. Being an undisputed fact that IGST refund is payable to the petitioner, the petitioner is absolutely entitled to the IGST refund from the respondents. If they cannot grant refund then in such case the exporter should be allowed re-credit in the Electronic Credit ledger. unambiguous. are taxable under the GST law. In erstwhile Drawback Rules of 1995, the customs duty, excise duty, and service tax were repaid through drawback mechanism whereas after coming into force of GST law , as both the latter taxes have subsumed in GST, therefore entitlement of drawback is limited to custom duty only and excise duty, and service tax which are subsumed in GST are refunded through IGST refund mechanism. the proper Customs officer determines that The reason is that drawback is limited to customs portion only resulting in repayment of customs duty . As No.131/2016-Cus(NT) dated 31.10.2016 (as amended by Notfn. CBIC clears Rs 10,700 cr GST, customs duty refund in 16 days 26 Apr, 2020, 05.37 PM IST. Under new scheme of drawback only one rate has been prescribed which is limited to custom portion of inputs. Ans. Taxpayer is registered under the GST law. While a transition period of three months has been allowed, the exporters shall have an option to claim only Customs portion of AIRs of duty drawback i.e. The IGST paid on the import is admissible as Input tax credit (ITC). After a number of exporters opted for the duty drawback option, they discovered that the IGST paid by them on inputs was much higher and opting for refunds would have been a better deal The application for IGST refund for exports shall be deemed to have been filed, when the conveyance carrying the export goods leaves India, i.e. sanction the refund of the IGST along with a 7% simple interest from the date The drawback of the input duty refund under the duty drawback scheme is that it is lower as compared to last year’s IGST refund as claimed by the exporters which further noted by the Commerce Ministry.. Under GST, exports and supplies to SEZ are zero rated as per Section 16 of the IGST … As the circular suggests, if an exporter consciously asks for a refund of the higher rate of duty drawback, he is not supposed to be entitled to IGST or ITC claims. No.59/2017-Cus(NT) dated 29.6.2017), under which All Industry Rates of Drawback had been notified and which were applicable for availing composite rates during period in question (i.e. The HC held that the IGST Refund where Higher drawback claimed on Exports should be processed immediately without any delay along with a simple interest of 7% per anum. 2.0 The issue has been examined extensively in this Ministry. Further, the duty drawback scheme shall continue and exporters undertaking exports during this period can claim a higher duty drawback. Foreign Trade Policy. Sub: Cases where IGST refunds have not been granted due to claiming higher rate of drawback OR where higher rate and lower rate were identical -reg. IGST refund mechanism is an electronic process: IGST refund mechanism is system-based and processed electronically in accordance with the declaration given in the Shipping Bill filed by Taxpayer and the details mentioned in the GST … 01.07.2017 and during the intervening period the rate of drawback was same for lower rate and higher rate i.e. In fact, for period 1.7.2017 to 26.7.2017, a manual declaration was also required to be given as the changes made on 26.7.2017 were made applicable for exports made from 1.7.2017 onwards. According to a government official, “exporters have said that they are willing to pay back the drawback with interest and they should be instead given IGST refund which is a much higher amount. reason for rejection of IGST refund on exports. [Para 9,9.1 of Circular 37/11/2018 dated 15- 03-2018] 3. option to claim refund on the exported goods to the extent of the IGST paid on Numerous representations have been received from exporters/ export associations, regarding cases where IGST refunds have not been granted because higher rate of drawback has been claimed or where higher rate and lower rate were identical. 1.7.2017 to 30.9.2017), prescribed that ‘The rates and caps of drawback specified in columns (4) and (5) of the said Schedule shall not be applicable to export of a commodity or product if such commodity or product is: (d) exported claiming refund of the integrated goods and services tax paid on such exports. Refund of excess duty drawback is a unilateral action: Refund of the differential duty drawback by the Taxpayer is a unilateral act by the Taxpayer not recognized under the law. 2.2 Notes and Condition (12A) of Notfn. No.59/2017-Cus(NT) dated 296.2017 and 73/2017-Cus(NT) dated 26.7.2017) prescribed that ‘The rates and caps of drawback specified in columns (4) and (5 ) of the said Schedule shall be applicable to export of a commodity or product if the exporter satisfies the following conditions, namely: (ii) If the goods are exported on payment of integrated goods and services tax, the exporter shall declare that no refund of integrated goods and services tax paid on export product shall be claimed; 2.3 In terms of Rules 12 and 13 of the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995, the shipping bill itself is treated as claim for drawback in terms of the declarations made on the shipping bill. IGST refund not applicable where higher DBK was claimed. 01.01.2021, Auto population of E-Invoice details in GSTR-1/2A/2B/4A/6A, Online communication on GST portal | Facility between Supplier and Recipient, Uploading Show Cause Notice and Order on GST Portal is Mandatory | SCN and order sent via email only is invalid, Analysis of New RBI Monetary Policy, 2020 & few recent changes by RBI. Rate of Duty Drawback available was 0.15% if they wanted refund of IGST or Inputs GST. This rule came into affect from 1.7.2017 and it was published on 29.06.2017. GST authorities directed to immediately Duty Drawback has been one of the popular and principal methods of encouraging export. Rule 96 of the CGST Rules is very clear and Administration. Being an undisputed fact that IGST refund is payable to the petitioner, the petitioner is absolutely entitled to the IGST refund from the respondents. Rate of Duty Drawback available was 0.15% if they wanted refund of IGST or Inputs GST. IGST refund not Allowed to Exporters after claiming benefit of higher duty drawback rate: Keywords: cbic, clarification, circular, igst refund, higher duty drawback rate benefit Created Date: 10/9/2018 8:41:11 PM IGST refund mechanism is an electronic process: IGST refund mechanism is system based and processed electronically in accordance with the declaration given in the Shipping Bill filed by Taxpayer and the details mentioned in the GST … order to claim refund, the Shipping Bill filed the Taxpayer shall be deemed to Services Tax Rules, 2017 (‘CGST Rules’). The judgment of the HC has clarified the legal position that the IGST Refund where Higher drawback claimed on Exports could be withheld only in circumstances permitted under law and shall not be withheld unreasonably. It has been noted that exporters had availed the option to take drawback at higher rate in place of IGST refund out of their own volition. When composite drawback rate was claimed (by declaring suffix A or C with Drawback serial number), exporter was required to tick DBK002 and DBK003 declarations in the shipping bills. Export General Manifest (EGM) is filed, and The applicant has furnished a valid Return in Form GSTR- 3 under Section 54 of GST Act, read with Rule 96 of CGST Rules. Duty Drawback and ITC Refund, Goods and Services Tax - GST. F. No. The Further, the new all industry rates of duty drawback have also been notified which are effective from 1st October, 2017. There was no self declaration given to ports by the exporters on this. this is totally unacceptable, government is not there to collect taxes only, they have to help us out. Drawback Claim : The Drawback as being claimed should not contain the Componenet of Excise/Service tax. IGST refund mechanism is an electronic process: IGST refund mechanism is system-based and processed electronically in accordance with the declaration given in the Shipping Bill filed by Taxpayer and the details mentioned in the GST return. You cannot decide only to take from the Govt. The Commerce Ministry has taken note of exporters’ complaints that the input duty refund under the duty drawback scheme claimed by some last year was much lower than the IGST (Integrated Goods & Services Tax) refunds due to them and it may ask the Finance Ministry to address the issue. No exporter would prefer to take benefit of 0.85% Duty Drawback against refund of IGST/ Input GST which was at least 5%. jurisdictional GST officer to withhold the IGST refund payment due to claim of Because in the initial period of operation of GST, exporters were not aware that if they claimed 1% Duty Drawback then they would not be allowed refund of IGST on Inputs. The Board has observed that – Exporters had availed the option to take drawback at higher rate in place of IGST refund out of their own volition. It is a totally wrong practice. No. be an application for refund of IGST, as per Rule 96 of the Central Goods and Unreasonable delays in grant of refund of Integrated Goods and Services Tax (‘IGST’) has impacted several exporters in the recent past. To ease this communication, the GST system has added a new Facility of “Communication Between Taxpayers” on the GST portal. 1. Who is required to Generate E-invoice? Members of the Council. process, converting it into bales and then exporting these cotton bales out of The rationale for not allowing the refund of IGST for those exporters, who claim higher duty drawback is that the higher duty drawback reflects the elements of Customs, Central Excise and Service Tax taken together and since higher duty drawback is already being availed than granting the IGST refund would amount to double benefit as the Central Excise and Service Tax has been subsumed in the GST. The same was required to be done w.e.f. In the case of M/s. as the Taxpayer exports the supplies outside of India, the supplies are By declaring drawback serial number suffixed with A or C and by making above stated declarations, the exporters consciously relinquished their IGST/ITC claims. No.131/2016-Cus(NT) dated 31.10.2016 (as amended by Notf. Save my name, email, and website in this browser for the next time I comment. eligible to be considered as ‘Zero Rate Supply’ in accordance with Section 16 The exporter first get the Shipping Bill amended and revert back the claim if any taken or make the shipping Bill free shipping Bill by converting the same. When CBIC own people were not aware of this rule then how they can expect exporters and their CHAs to know this. Re Export can be sent on payment of IGST/LUT/Bond. , I argued before *Madurai Bench of Madras Highcourt *, an issue relating to IGST refund being refused by the department because of claim of Higher duty drawback. 13/2020–Central Tax dated 21st March, 2020, amended from time to time, every registered person who. The Taxpayer has also furnished the It is unfair to claim ignorance when the CBIC has published the notification, blaming the GST advisor and shipping agents. Dear Member They stated that the petitioner has claimed a higher duty drawback. After conversion of Shipping Bills they will be eligible to claim refund of IGST paid. Amit Cotton Industries [R/ Special Civil Application No. What ignorance you are talking about, you must accept that GST was applied in hurry mode, no one was prepared for it. Frequently Asked Questions on IGST refunds on goods exported out of India Q.l What is zero rated supply under GST? This is wrong stand taken by CBIC. We claimed drawback of 88,000 rupees and GST stuck is more than 15 lac. was not a permitted reason under the GST law to withhold refunds. Legally the CBIC clarification is right, but still ways are open for claiming the drawback. Counterparty can send his reply using the same feature. Now exporters have paid GST of at least 5% on inputs or would have charged 5% IGST.