GST machinery still unrolling

After the October 6 meeting of the Goods and Services Tax (GST) Council, the finance minister had announced that the process of refund of Integrated GST (IGST) paid on export goods in July would begin from October 10. The start of this process is delayed as the chief controller of accounts is unable to initiate the process of IGST refund through the Public Financial Management System (PFMS) portal, due to ongoing migration of the hardware and software infrastructure. 

So, the Customs department was asked to issue a single cheque to the banks in question with a list of exporters, containing details of their bank accounts, amount of refund, etc. The authorised bank account of the exporters mentioned will be credited through ECS/NEFT/RTGS. This system will be used to make immediate refunds till the process of payment through PFMS starts on October 16.  

Refunds will be available to exporters whose details of zero-rated supplies reported in Table 6A of their GSTR-1 return match with the corresponding details available in Customs systems, in line with details provided in shipping bills or bills of export and those furnished in the Export General Manifest (EGM) or Export Report filed by the shipping lines or airlines or carriers. Filing of a valid GSTR-3 or GSTR-3B return is another pre-condition for considering the shipping bill or bill of export as a claim for refund.

The refund amount shall be credited to the bank account of the exporter registered with Customs, even if this is different from the bank account of the applicant mentioned in his registration particulars. However, exporters have been also advised to change the bank account declared to Customs to align it with their GST registration particulars or add the account declared with Customs in their GST registration details. Also, if the bank account has not been validated by PFMS, the exporter must get the details corrected in the Customs system, so that the account gets validated by PFMS. Exporters have also been advised not to change their bank account details frequently, to avoid delay in refund payment.

For August and subsequent months, the facility of filing GSTR-1 has not been made available as yet by the GST Network (GSTN), the system’s information technology backbone. To facilitate processing of refunds, GSTN is making available on its portal a separate utility for filing details in Table 6A of GSTR-1. Exporters have been advised to give the requisite details once GSTN develops this utility. The government intends to start the process of refund of IGST paid on export goods in August by October 18. 

These instructions of the Central Board of Excise and Customs cover only the IGST paid by exporters of goods. Instructions on refund of IGST paid by services exporters, refund of unutilised credit on account of export under bond or letter of undertaking, and refund of IGST paid on supplies to Special Economic Zones without filing a bill of export are yet to be issued. Meanwhile, based on the GSTR-1 returns for July, the GSTN has auto-populated the details in GSTR-2A and sent these to the tax payers for confirmation. The last date for filing GSTR-2 returns for July is the end of October.

E-mail: tncrajagopalan@gmail.com