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Common IGST Refund issues faced by Exporters in India
As per rule 96 of the CGST Rules, 2017, the shipping bill filed by an exporter shall be deemed to be an application for refund of integrated tax paid on the goods exported out of India and such application shall be deemed to have been filed only when-
As per CGST Rules, refund of IGST is not available to an exporter if:
- They have availed of duty drawback on CGST, SGST or IGST. However, they may claim a refund of IGST if they have availed of drawback on basic customs duty
- They obtained Inputs at a concessional rate of 0.1%. In such a case, export cannot be with payment of IGST but must be executed through LUT/bond
- They imported inputs under the Advance Authorization scheme. Here too, the final product must be exported under LUT/bond and not with payment of IGST. (Advance Authorization is an export incentive that allows duty-free import of inputs required in making products for export)
Also reference may be taken from the Board Circular No. 16/2019-Customs. The Customs officer at the port of export shall proceed to process the IGST refund as per the instructions. Circular may be refer from the CBIC website (www.cbic.gov.in).
IGST refund claim might be stuck due to
1. Non-transmission of data: As mentioned above, GSTN won’t transmit data to Icegate if the details in forms GSTR-1 and GSTR-3B don’t match.
2. Data mismatch on Icegate: If Icegate finds a mismatch between the returns data transmitted by GSTN and the shipping bill details, you will receive one of the following error codes in response to your application
Response Code Response Description Contact Person
SB000 Successful Kindly contact custom location to scroll generation
SB006: Gateway EGM not available. If the EGM is not filed/ filed incorrectly, supplementary EGM needs to be filed by Shipping Line and approved by Gateway Port Officer. If the EGM is already filed, please revalidate the EGM from respective Custom Location.
SB002: EGM not filed : Exporter may approach the Shipping Lines to file the EGM immediately. If EGM is already filed by shipping Line correctly, Please contact Customs location to Revalidate EGM by EGM Officer.
SB001 Invalid SB Details For any further help on how to amend an invoice on GST System, please contact the GST Helpdesk. Your Shipping Bill validation is failed at ICEGATE System with error code SB001 – the combination of SB Number, SB
Date and Port Code in the invoice transmitted from GST System doesn’t match the details given in the shipping bill. You may amend the invoice details on the GST System.
SB005 Shipping Bill’s have been rejected with error code SB005 (Invalid Invoice Number). You are advised to refer the Customs Circular Board`s Circulars 5/2018-Cus. dated 23.02.201808/2018 and Circular No. 05 /2021-Customs dated 17.02.2021 and approach respective Customs Location for manual validation of Shipping Bills.
SB104 Port code is not valid. Contact GSTN helpdesk
SB003 Invalid GSTN ID Contact GSTN helpdesk
SB009 SB is Cancelled Kindly contact to respective location
SB005, SBV00 Manually validated Kindly contact custom location to scroll generation
SB004, SBV00 Manually validated Kindly contact custom location to scroll generation
When all data points match, Icegate returns an SB000 (Successfully Validated) response code and assigns an IGST scroll number to the eligible shipping bill. You can use this number to check the status of your claim on Icegate on IGST Scroll Sanctioned Status.
Grant of Provisional Refund
The category of persons making zero rated supplies will be entitled to provisional refund of 90% of the claim in terms of Section 54(6) of CGST Act, 2017. Rule 91 of CGST Rules, 2017 provide that the provisional refund is to be granted within 7 days from the date of acknowledgement of the refund claim. An order for provisional refund is to be issued in Form GST RFD 04 along with payment advice in the name of the claimant in Form GST RFD 05. The amount will be electronically credited to the claimant’s bank account. Rule 91 also prescribe that the provisional refund will not be granted if the person claiming refund has, during any period of five years immediately preceding the tax period to which the claim for refund relates, been prosecuted for any offence under the Act or under an earlier law where the amount of tax evaded exceeds two hundred and fifty lakh rupees.
Download the Circular copy below:
Board Circular No. 16/2019-Customs:
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Disclaimer: Please refer to the official Notification/Circular/Notice before effecting any decision.