IGST Refund claim process against Manual Shipping Bills

Let’s consider a scenario where a manual shipping bill for exports is filed and the IGST refund is not credited to the Exporters bank account. There are few checks and balances that the Exporter has to ensure before they get the refund. A step wise flow has been outlined below for a ready reference.

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First and foremost, the Manual Shipping bill needs to be mapped in the ICES system first, as per ICES Advisory 21/2020 dated 26.06.2020 issued by DG System.
Covering letter cum Application needs to be submitted for an application for Refund of IGST amount under Section-27 of the Indian Customs Act, 1962.
All supporting documents must be enclosed and adduced along with the Covering cum application letter as per the provisions of Section 28C of the Indian Customs Act, 1962.
In case there is delay in filing the application for refund under section 27 of the Indian Customs Act, 1962, reasonable justification must be provided with documentary proof, if possible, to condone the delay in filing for the refund.
Check for the SB error codes if any once the Shipping bills are mapped in the ICES system and data transmission is done from Customs Icegate server to the GST server or vice versa.
Address the SB errors, if any as per the procedures laid down by the department.
Your IGST refund must be credited to your bank within 90 days from the date of submission of the application at the jurisdictional customs Commissionerate office.
In case you don’t get the refund within the stipulated timeframe (90 days) then kindly do a follow up with the customs department and ask for the current status of the refund application.

Section 27A-Interest on delayed refunds:

If any duty ordered to be refunded under sub-section (2) of section 27 to an applicant is not refunded within three months from the date of receipt of application under sub-section (1) of that section, there shall be paid to that applicant interest at such rate, ²[ not below five percent.] and not exceeding thirty percent per annum as is for the time being fixed ³[by the Central Government by Notification in the Official Gazette], on such duty from the date immediately after the expiry of three months from the date of receipt of such application till the date of refund of such duty.

The CGST Rule, 2017 envisages the refund of IGST amount on export of goods from India. As per Rule 96 of the CGST Rules 2017, dealing with refund of IGST paid on goods exported out of India, 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, once both the export general manifest (EGM) and valid return in Form GSTR-3 or Form GSTR- 3B, as the case may be, has been filed. Thus, once the shipping bill and the EGM is filed and a valid return is filed, the application for refund shall be considered to have been filed and refund shall be processed.

Reasonable Restriction imposed on IGST Refunds:

Circular-No-24-2023- Customs Dtd 30.09.2023

Reference is invited to sub section (4) of section 16 of IGST act 2017 and Notification No. 01/2023-Integrated Tax dated 31.08.2023. Vide Notification No. 27/2023-Central Tax dated 31.07.2023, Section 16(4) of IGST Act, 2017 will be effective from 01.10.2023.

Further, in terms of above provision, vide Notification no. 01/2023-Integrated Tax dated 31.08.2023, it has been notified that all goods or services (except the goods specified in column (3) of the TABLE in Notification) may be exported on payment of integrated tax on which the supplier of such goods or services may claim the refund of tax so paid.

Goods mentioned in the Table annexed to the above notification may be exported only under LUT. Since IGST refund is paid at shipping bills level, the checks have been enabled at shipping bill level. It may be noted that, in cases where a shipping bill contains single or multiple invoices for which IGST have been paid and even if one invoice contains an item which is restricted for export on payment of IGST under section 16(4) of the IGST Act, the shipping bill containing such items will not be allowed to be filed.

Download the Customs Circular below:

Circular-No-24-2023-Customs-Dtd-30.09.2023Download

Source: CBIC, Dept. of Revenue, Min. of Finance, Govt of India

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