Clarifications on exports related refund issues. Rescinded vide Circular No. 125/44/2019 – GST dated 18.11.2019.

Circular No.: 37/11/2018-GST
Date of Circular: 15th March 2018
Relevant Sections and Rules:

• Central GST Act, 2017:
  • Section 54(3): Refund of unutilized input tax credit
  • Section 142(3)-(5): Refund of pre-GST tax/duty
  • Section 168(1): Power to issue instructions
• CGST Rules, 2017:
  • Rule 89, 90, 96A: Refund provisions
• Integrated GST Act, 2017:
  • Section 16: Zero-rated supply (exports)
• Notifications:
  • No. 37/2017-CT, 40/2017-CT, 41/2017-IT, 3/2018-CT

Summary of Circular:

This circular provides detailed clarifications on export-related refund issues under GST, consolidating and updating earlier instructions.

1. Drawback and Refund Eligibility:
   Refund of unutilized ITC is not barred if drawback is claimed only on basic customs duty. If central tax is availed as drawback, refund is not permitted.

1. Use of Table 9 in GSTR-1 for Rectification:
   Errors in Table 6A/6B of GSTR-1 can be corrected in Table 9 of subsequent returns. Refund officers must consider these corrections during refund processing.

1. Exports Without Prior LUT:
   If exports are made before filing LUT, refund may still be granted. LUT delay may be condoned if exports actually took place.

1. Export After 3-Month Period (Rule 96A):
   Exporters should not be forced to pay IGST if goods are exported after 3 months of invoice. Jurisdictional commissioner may grant post-facto time extension.

1. Deficiency Memos – One Time Only:
   Only one deficiency memo can be issued for a refund application. Fresh application post-rectification must be accepted unless prior deficiencies persist.

1. No Need for Self-Declaration on Prosecution with Every Claim:
   Exporters who have submitted such a declaration during LUT filing need not repeat it with each refund claim.

1. Refund of Transitional Credit Not Allowed:
   Transitional credit (carried forward from pre-GST laws) cannot be treated as Net ITC for refund purposes, as it is not availed during the relevant period.

1. Discrepancy Between GST Invoice and Shipping Bill:
   In case of mismatch, refund shall be granted based on the lower value between the GST invoice and the shipping bill.

1. Refund of Taxes Paid Under Earlier Laws:
   Such refunds must be processed under pre-GST laws. GST portal applications (RFD-01A) should be rejected, and PMT-03 issued to inform the taxpayer.

1. Refund Filing Frequency:
   Refund claims can be filed monthly, quarterly, or by clubbing months, but not across financial years.

1. BRC/FIRC Not Required for Export of Goods:
   BRC/FIRC is mandatory only for services. Export of goods does not require realization proof for refund processing.

1. Supplies to Merchant Exporters at Concessional Rate:

• The 0.05% / 0.1% rate is optional.
• Exporters using concessional inputs can claim ITC and refund under inverted tax structure but must export under bond/LUT only.

1. Documents for Export Refunds (Table Provided):
   Officers must process refunds based only on prescribed documents. No extra documents to be demanded unless data is unavailable electronically.

1. Scope and Direction:

• Instructions apply to exports made on or after 1st July 2017.
• Minor procedural lapses should not lead to refund rejection.

Source: Circular No.: 37/11/2018-GST