Imported Goods Returned to Overseas Party - IGST Claim, Goods and Services Tax - GST

[Praveen Nair]

Dear Experts

Goods were imported by paying IGST, now the material is rejected and is to be returned to the exporter overseas. How do we get refund of the IGST amount?

Do we have to export and claim IGST?

Kindly suggest

Regards | Pravin Nair

Posts / Replies

[MUKUND THAKKAR]

Sir,

please refer refund condition as per GST law. as per my view you have take credit of IGST instated of refund procedure.

[Alkesh Jani]

Sir,

In this regards, Please refer Notification No. 36/95-Cus (NT) dated 26/05/1995 as amended and lastly it was amended vide Notification No.57/2017-Cus (NT) dated 29.06.2017.

My point of view is that you need to claim drawback and not refund as it is re-exportation.

Our experts may correct me if mistaken.

Thanks

[YAGAY and SUN]

Re Export can be sent on payment of IGST/LUT/Bond. Customs Duty paid earlier can be take back as Duty Drawback under Section 74 of the Customs Act,1962 to 95% extent if re export is within prescribed time limit otherwise slab wise rate of duty drawback would applicable.

[Kishan Barai]

Government has prescribed a format for applying for refund and connected documents and declaration.
Required Documents for processing of refund claims

Refund Application (Part-A, B & C) in proper proforma with declaration
Duplicate Bill of Entry (Importer’s Original Copy) with copies of invoice and Bills of Lading
Original TR-6 challan for payment of Customs duty.
Calculation / Worksheet
Non availment CENVAT credit from the concerned Central Excise Authorities wherever required.
Order of reassessment in cases where the original assessment has been challenged to qualify for refund. Order of Commissioner (Appeal), CESTAT/High Court, wherever applicable.
Original Chartered Accountant Certificate for not passing on the burden to others
All relevant documents to substantiate their claim for Unjust enrichment like Balance Sheet, Schedule etc
Processing of Claims

The refund claims are covered under Section 27 of Customs Act, 1962, which dwells in detail as to how the refund claims are to be considered for sanctioning to the claimants.

The Important points for considering the sanction of refund:

Limitation
This point taken care of application of section which mandates that every refund claim has to be filed within 06 months from the date of payment. Refund Claims received after the statutory period of 06 months are not entertained as it is barred by limitation.

Eligibility
The eligibility of the refund of an assessed document is studied whether the assessed documents is re-assessed for claiming the benefit of notification, different rate of duties, revising the valuation, changing the classification and revising the duty calculation.

Scrutiny of claims with respect to the issue of unjust enrichment
As per the judgement of the Hon’ble Supreme Court in the case of Sahkari Khand Udyog Vs Collector of Central Excise 2005(181) ELT 328 (SC) on the issue of unjust enrichment, all the refund claims have to be studied from the point of view whether the provisions of unjust enrichment get attracted. Further, as per Section 27, 28(c) & 28(d), the Importer has to prove that duty burden has not been passed on to any customer/others either directly or indirectly and the onus is on the importer/claimant in this case.

B. REFUND OF SAD (Now it's no more)

Refund Application

CBEC has prescribed a format for applying SAD refund and connected documents and declaration. These are as under

Required Documents for 4% SAD refund

Refund Application (Part-A, B & C) in proper proforma with declaration
Duplicate Bill of Entry (Importer’s Original Copy) with copies of invoice and Bills of Lading
Original TR-6 challan for payment of Customs duty.
Original Sales Invoices, alongwith list containing Invoice No., Date, Amount of ST/VAT paid on imported goods for which Refund is claimed.
Calculation / Worksheet
Self Declaration
All original challans evidencing payment of Sales Tax /VAT with detail of invoices
Original Chartered Accountant Certificate
All relevant documents to substantiate their claim for Unjust enrichment.

How to apply

The refund application has to be filed within one year from the date of payment of Customs duty i.e. within one year of TR 6 Challan date. Only one refund application for one importer in a month is permitted. The application filled in all respects has to be submitted to Appraising Refund Section of Kolkata Customs House and obtain a dated acknowledgement.

Processing

The TA/STA of CRC IIA/B receives the refund application and registers the refund claim and allots one unique number for the same. He submits the refund file on the same/subsequent day to AC for his perusal. After the AC/CRC, signs as a token of having seen the refund claim, the refund claim is scrutinized by the STA/EO for any deficiency of documents. If they notice any deficiency, the deficiency memo is issued.

If the refund application is in order, the same is taken up for processing as per the turn. Refunds amounts of less than ₹ 50,000/- are processed by the EO and other claims of refund amount more than 50,000/-are processed by the AO/Supdt.(P). They will prepare the brief facts and submit the same to AC for approval. AC will scrutinize the submitted documents and approve the brief facts, if everything is in order. Otherwise necessary query will be raised for clarification. Once the AC approves the brief facts, O-I-O number is obtained and O-I-O is issued. Then NOC from Groups/other sections is obtained. Then Refund order is prepared by AO/Superintendent and issued to party for signature verification/bank endorsement. If the refund amount is more than ₹ 5 lakhs then file is forwarded to audit section for pre-audit. After receipt of file from audit, file is forwarded to CAO for preparation of cheque. CAO will verify non payment of any refund against the said B’s/E and also verifies the genuineness of TR6 Challans and prepares the cheque, if everything is in order. Then the cheque is handed over to the authorized representative of the Importer