Gst refund in case of export of goods with payment of tax
This query is : Resolved
02 July 2019
ONE OF MY CLIENTS EXPORT GOODS TO USA WITHOUT PAYMENT OF ANY TAXES, NOW HE HAS TO CLAIM REFUND OF GST ...WHAT IS THE PROCEDURE. IS IT ENOUGH TO UPDATE IEC CODE IN THE REGISTRATION DETAILS. OR ANY OTHER PROCESS IS TO BE FOLLOWED. PLZ SUGGEST.
03 July 2019
GST refund application and form RFD 01 online procedure has to be complied with(time limit is 2 years from relevant date), so apply as soon as possible(could get lapse)
27 July 2024
### GST Refund Procedure for Export of Goods with Payment of Tax
When goods are exported, they can either be exported under a **Zero-Rated Supply** (without payment of GST) or with **Payment of Tax** (with GST paid at the time of export).
Since your client has exported goods to the USA **with payment of GST**, here’s the procedure to claim a refund:
#### **1. Understanding Zero-Rated Supply vs. Export with Payment of Tax**
- **Zero-Rated Supply:** Exports are considered zero-rated supplies, which means the applicable GST rate on exports is 0%. This means no tax is payable on exports, but the exporter can claim a refund of the input tax credit (ITC) on inputs used for export.
- **Export with Payment of Tax:** If GST was paid at the time of export, the exporter can claim a refund of the GST paid on the exported goods.
#### **2. Procedure to Claim GST Refund for Export with Payment of Tax**
1. **Ensure Correct IEC Code Registration:**
- **Update IEC Code:** Ensure that the Import Export Code (IEC) is correctly updated in the GST registration details. This is necessary for processing refund claims for exports.
2. **Prepare Export Documentation:**
- **Export Invoices:** Maintain all invoices and shipping bills for the exported goods.
- **Proof of Export:** Keep copies of the export bills, shipping bills, and proof of payment of GST.
3. **File GST Returns:**
- **GSTR-1:** Report the export transactions in GSTR-1. Ensure that the export invoices are correctly reflected.
- **GSTR-3B:** Report the GST paid on the exported goods in GSTR-3B.
4. **Claim Refund in GST Portal:**
- **Refund Application:** File a refund application on the GST portal. The application should be filed under the "Refund" tab in the GST portal.
- **Select Refund Type:** Choose the refund type as “Refund of GST paid on export of goods.”
- **Fill Form RFD-01:** Submit Form RFD-01 to apply for the refund of the GST paid. Provide details of the export invoices and the GST paid.
5. **Submit Supporting Documents:**
- **Attach Documents:** Submit the required documents along with the refund application, including invoices, shipping bills, and proof of payment of GST.
- **Bank Details:** Provide bank details for the refund.
6. **GST Refund Process:**
- **Processing by Authorities:** The GST authorities will process the refund application. They may verify the details and documents before approving the refund.
- **Refund Payment:** Once approved, the GST refund will be credited to the bank account specified.
#### **Key Points to Remember**
- **Timely Filing:** Ensure that the refund application is filed within the prescribed time limits (typically, one year from the relevant date).
- **Documentation:** Maintain all supporting documents as the authorities may request them during the refund processing.
- **Consult a GST Professional:** For complex scenarios or to ensure compliance, consulting a GST advisor or tax professional is recommended.
### Summary of Steps:
1. **Update IEC Code:** Ensure it is correctly updated in GST registration.
2. **Prepare Documents:** Maintain all export-related documents.
3. **File Returns:** Report the export transactions in GSTR-1 and GSTR-3B.
4. **Apply for Refund:** File the refund application (Form RFD-01) on the GST portal.
5. **Submit Supporting Documents:** Provide necessary documents and bank details.
6. **Track Refund Status:** Monitor the status of the refund application on the GST portal.
By following these steps, your client can successfully claim a refund for GST paid on exports to the USA.
When goods are exported, they can either be exported under a **Zero-Rated Supply** (without payment of GST) or with **Payment of Tax** (with GST paid at the time of export).
Since your client has exported goods to the USA **with payment of GST**, here’s the procedure to claim a refund:
#### **1. Understanding Zero-Rated Supply vs. Export with Payment of Tax**
- **Zero-Rated Supply:** Exports are considered zero-rated supplies, which means the applicable GST rate on exports is 0%. This means no tax is payable on exports, but the exporter can claim a refund of the input tax credit (ITC) on inputs used for export.
- **Export with Payment of Tax:** If GST was paid at the time of export, the exporter can claim a refund of the GST paid on the exported goods.
#### **2. Procedure to Claim GST Refund for Export with Payment of Tax**
1. **Ensure Correct IEC Code Registration:**
- **Update IEC Code:** Ensure that the Import Export Code (IEC) is correctly updated in the GST registration details. This is necessary for processing refund claims for exports.
2. **Prepare Export Documentation:**
- **Export Invoices:** Maintain all invoices and shipping bills for the exported goods.
- **Proof of Export:** Keep copies of the export bills, shipping bills, and proof of payment of GST.
3. **File GST Returns:**
- **GSTR-1:** Report the export transactions in GSTR-1. Ensure that the export invoices are correctly reflected.
- **GSTR-3B:** Report the GST paid on the exported goods in GSTR-3B.
4. **Claim Refund in GST Portal:**
- **Refund Application:** File a refund application on the GST portal. The application should be filed under the "Refund" tab in the GST portal.
- **Select Refund Type:** Choose the refund type as “Refund of GST paid on export of goods.”
- **Fill Form RFD-01:** Submit Form RFD-01 to apply for the refund of the GST paid. Provide details of the export invoices and the GST paid.
5. **Submit Supporting Documents:**
- **Attach Documents:** Submit the required documents along with the refund application, including invoices, shipping bills, and proof of payment of GST.
- **Bank Details:** Provide bank details for the refund.
6. **GST Refund Process:**
- **Processing by Authorities:** The GST authorities will process the refund application. They may verify the details and documents before approving the refund.
- **Refund Payment:** Once approved, the GST refund will be credited to the bank account specified.
#### **Key Points to Remember**
- **Timely Filing:** Ensure that the refund application is filed within the prescribed time limits (typically, one year from the relevant date).
- **Documentation:** Maintain all supporting documents as the authorities may request them during the refund processing.
- **Consult a GST Professional:** For complex scenarios or to ensure compliance, consulting a GST advisor or tax professional is recommended.
### Summary of Steps:
1. **Update IEC Code:** Ensure it is correctly updated in GST registration.
2. **Prepare Documents:** Maintain all export-related documents.
3. **File Returns:** Report the export transactions in GSTR-1 and GSTR-3B.
4. **Apply for Refund:** File the refund application (Form RFD-01) on the GST portal.
5. **Submit Supporting Documents:** Provide necessary documents and bank details.
6. **Track Refund Status:** Monitor the status of the refund application on the GST portal.
By following these steps, your client can successfully claim a refund for GST paid on exports to the USA.
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