27 Oct 2018Posted By: Mudit Handa

CBIC gives clarification over the certain issues of IGST refunds

We all are aware that in the current scenario of GST, one of the major issues that are affected a large number of taxpayers is of GST refund claims.

Evidently, the exporters are increasingly claiming their refunds of IGST that they had incurred on the exports they had conducted. A large amount of IGST refunds that are being claimed by the exporters are in relation with the period of exceeding a year since the inception of GST regime in India.


Very recently, the Central Board of Indirect taxes and Customs (CBIC) has recently made several provisions and auxiliary measures by which various technical glitches due to the mismatches between the Shipping Bills and the data entered while GST return filing procedure with respect to the FORM GSTR-1 can be rectified or corrected in the system.


In addition to this, the CBIC has now has issued a circular clarifying certain issues with regard to GST refund, such as-

  • Need of re-credit in the electronic ledger (through the FORM GST RFD-01B) where a deficiency memo in FORM GST RFD-03 is issued to taxpayers,
  • IGST refund claims by exporters who have received capital goods under EPCG, and so on.


#1. What has government done for the exporters who have prefered EPCG scheme?

Through the recent clarification, the CBIC has now enabled exporters to claim the refund of IGST paid on exports that they have procured as capital goods under Export Promotion Capital Goods (EPCG) scheme.

  • The facility of claiming the refund of IGST paid on exports by the exporters from availing in certain scenarios were hitherto restricted as per the Rule 96(10) of the Central Goods and Services Tax Rules, 2017.
  • The 30th GST Council meeting on 28th September 2018, had given approval to the proposal of suitable amendment of the said Rule 96(10) as well as the Rule 89(4B) of the CGST Rules prospectively as to enable such exporters to avail the refund of IGST paid.
  • The CBIC has clarified on the same and has finally enabled exporters to claim the refund of IGST paid on exports that they have procured as capital goods under Export Promotion Capital Goods (EPCG) scheme.

Read the  to know in detail.


#2. What clarification has been given for IGST refund in case of deficiency memo?

It has been clarified that once a deficiency memo has been issued against an application for refund, the amount of Input Tax Credit debited under sub-rule (3) of rule 89 of the Central Goods and Services Tax Rules, 2017 (hereinafter referred to as the “CGST Rules”) is required to be re-credited to the electronic credit ledger of the applicant by using FORM GST RFD-01B and the exporter having a unique Import Export Code is expected to file a fresh application for refund.


#3. What is a Deficiency memo under GST?

In case of any mismatch in the GST returns, if an exporter wishes to claim an IGST refund a Deficiency memo issued within 15 days of filing application of refund.

The Deficiency memo is issued using FORM GST RFD-03.


If you need any sort of assistance related to the process of getting GST registration procedure or Import Export Code, feel free to contact our business advisor at 8881-069-069.


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Posted By Mukesh Agarwal
Posted Date 2018-10-28 23:21:53

My son wants to start drop shipping business through own website from India, where seller and buyer both will be offshore (from 2 different countries). As the goods are not entering in Indian territory so no import neither export is effecting neither gst is applicable as I think it is also known as merchanting trade. What is the procedure to start how should I start and proceed, what legal license required, formalities to do before and after starting this business. Please help as no one has right knowledge in this regard I came across.

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