15 July 2022
Hi, Client has made export under LUT without payment of IGST but in GSTR 1 export invoices were shown as Bills with payment of IGST. Now the department is demanding IGST with interest. Can the same be rectified? or whether the IGST amount should be paid? IF paid can we apply for refund of the IGST amount paid?
07 July 2024
In this scenario, the export invoices were incorrectly reported in GSTR-1 as exports with payment of IGST instead of under the Letter of Undertaking (LUT) without payment of IGST. Here are the steps you can take to rectify the situation and address the demand from the department:
### Step-by-Step Guide to Rectify and Handle the Situation:
#### 1. **Verify the Error:** - Confirm that the error in reporting was indeed due to incorrect classification of export invoices in GSTR-1. - Check the details of the LUT filed and ensure it was valid for the period during which the exports were made.
#### 2. **Communicate with the Department:** - Write a letter to the GST department explaining the mistake in reporting and provide evidence of the LUT. - Request the department to allow rectification of the error in the GSTR-1 return.
#### 3. **Rectification in GSTR-1:** - Although GSTR-1 cannot be edited for past returns, you can adjust the mistake in the subsequent month's return. - Show the correct details of the exports under LUT in the subsequent GSTR-1 return and reverse the incorrectly reported exports with payment of IGST.
### Sample Letter to GST Department:
```plaintext [Your Company Name] [Your Address] [City, State, Zip Code] [Email Address] [Phone Number] [Date]
To, The Assessing Officer, [Address of the GST Department’s Office] [City, State, Zip Code]
Subject: Request for Rectification of Export Invoices under LUT in GSTR-1
Respected Sir/Madam,
We are writing to bring to your kind attention an inadvertent error in our GSTR-1 filing for the period [mention period]. We have exported goods under the Letter of Undertaking (LUT) without payment of IGST. However, due to a clerical error, these exports were incorrectly reported as exports with payment of IGST in our GSTR-1 returns.
We sincerely apologize for this mistake and have attached a copy of the LUT and the relevant export invoices for your reference. We request you to kindly allow us to rectify this error by adjusting the incorrect entries in our subsequent GSTR-1 return.
We assure you that this was an unintentional mistake and seek your guidance and support in rectifying the same. Please let us know if there are any further formalities or documents required from our end to facilitate this correction.
Thank you for your understanding and cooperation.
Yours sincerely,
[Your Name] [Your Designation] [Your Company Name] [GSTIN] ```
#### 4. **Payment of IGST and Refund Application:** - If the department insists on payment of IGST along with interest, you may need to pay the IGST to comply with the demand. - After making the payment, you can apply for a refund of the IGST paid on exports under LUT. The refund application should be supported by the necessary documents, including: - Proof of payment of IGST. - Copies of export invoices. - Copy of the LUT. - Proof of realization of export proceeds (Bank Realization Certificate).
#### 5. **Applying for Refund:** - File the refund application using Form GST RFD-01 on the GST portal. - Select the relevant reason for refund (Refund of IGST paid on export of goods/services). - Attach all supporting documents and submit the application.
### Important Points to Remember: - **Documentation:** Keep all documentation related to LUT, export invoices, and communication with the department organized and readily available. - **Timeliness:** Ensure timely communication with the department and submission of the refund application. - **Compliance:** Regularly follow up with the department regarding the status of your rectification request and refund application.
By following these steps, you can address the issue with the incorrect reporting of export invoices, comply with the department's demands if necessary, and apply for a refund of the IGST paid.
CAclubindia
