Mechanism for refund of additional Integrated Tax (IGST) paid on account of upward revision in price of the goods subsequent to export.

Circular No.: 226/20/2024-GST
Date of Circular: 11th July 2024
Relevant Sections and Rules:

• CGST Act, 2017:
  • Section 54(5), (6), (14): Refund provisions
  • Explanation (2)(a) to Section 54: Relevant date
  • Section 168(1): Power to issue instructions
• CGST Rules, 2017:
  • Rule 89(1B), 89(2)(bb), 89(2)(bc): Refund for upward revision post-export
• Notification: 12/2024-CT dated 10.07.2024
• Form: GST RFD-01, RFD-06, RFD-05, Statements 9A & 9B

Clarification on Refund Mechanism for Additional IGST Paid Due to Upward Price Revision After Export

1. Issue Addressed:
   Exporters often revise the price of goods after export based on contractual terms or international indices, leading to payment of additional IGST. Previously, there was no mechanism to claim refund of this extra IGST.
   This circular provides the procedure to claim such refunds.
2. Filing Refund Application for Additional IGST:

• Exporters must file refund application in FORM GST RFD-01 electronically.
• Category: “Any other” with remark: “Refund of additional IGST paid on account of increase in price subsequent to export of goods.”
• Must attach supporting documents (see point 6 below).

➤ Processed by: Jurisdictional GST officer (not Customs).

3. Portal Updates and Interim Process:

• GSTN is developing a dedicated refund category for such cases.
• Until then, use the “Any other” category in RFD-01.
• Must upload Statements 9A & 9B, and other supporting evidence.

4. Minimum Refund Threshold:
   As per Section 54(14), no refund shall be granted if the amount is less than ₹1,000.
5. Time Limit for Filing Refund Claim:

• Application must be filed within 2 years from the relevant date (i.e., export date).
• For past cases where the relevant date was before 10.07.2024 (when Rule 89(1B) was inserted), refund claim can be filed within 2 years from 10.07.2024.

6. Mandatory Documents to be Attached:
   (a) Shipping bill/bill of export
   (b) Original invoices
   (c) Contract/Agreement supporting price revision
   (d) Original + revised (debit note/supplementary) invoices
   (e) Proof of IGST payment + GSTR-1 & GSTR-3B references
   (f) FIRC for additional foreign exchange
   (g) CA/CMA certificate verifying extra foreign exchange remittance
   (h) Statement 9A and 9B of RFD-01
7. Verification by Proper Officer:

• Ensure details of revised invoice and debit note are reflected in GSTR-1 and GSTR-3B.
• Validate foreign exchange remittance and corresponding revised values.

8. Sanction Process:

• If eligible, refund sanction via FORM GST RFD-06.
• Payment order via FORM GST RFD-05.
• Officer must also upload a speaking order, as per Instruction No. 03/2022-GST.

9. Downward Revision Cases:
   If price is reduced after export, exporter must repay proportionate IGST refund with interest.
   ➤ Officer processing upward revision refund must verify repayment of excess refund for any price reduction.

Source: Circular No.: 226/20/2024-GST