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31 Mar 2018

Processing of refund of IGST paid on exported goods in case of EGMs related errors

The mechanism for refund of IGST on the goods and services exported out of India has been governed under Rule 96 of the CGST Rules. As per the Rule, the shipping bill filed by the exporter shall be deemed to be an application for refund of integrated tax paid on the goods exported outside India. Also, filing of export goods manifest (EGM), apart from shipping bills and return in Form GST-3B is a mandatory requirement for processing of the refund claim. The CBEC has already issued certain circulars, for the purpose of providing clarity on certain problems arising on sanction of refund of IGST paid on goods exported out of India.

Another issue has also arisen, in relation to exports from Inland Container Depots (ICDs) either due to non-filing of Export General Manifest (EGM) at gateway port or information mismatch between local and gateway EGMs. Generally, shipping lines/agents files EGM electronically for exports originating from gateway ports. However, for cargo originating from ICDs, the Shipping lines/agents are filing EGMs in manual mode. The absence of electronic EGMs and their integration with local EGMs is a major concern for processing of refund in case of exports from ICDs.

Recently, the CBEC vide Circular No. 6/2018-Customs dated 16-03-2018, in order to ensure hassle free processing of refund claims, the shipping lines are required to include the shipping bills originating from ICDs while filing the electronic EGMs at the gateway ports. Also, the jurisdictional officers at ICDs shall ensure

  1. filing of local EGM, i.e. train or truck summary, immediately after cargo leaves port,

  2. liaising with jurisdictional offices at gateway port for incorporation of shipping bills pertaining to the cargo originating at ICDs, in EGMs filed at gateway port,

  3. rectification of errors in local and gateway EGM, wherever necessary

The CBEC has directed swift rectification at the end of both, officers working at ICDs and gateway ports to avoid sanction of refund on IGST paid export and to have effective co-ordination between the domestic carriers who file local EGMs, and shipping line agents, who files gateway EGMs.

Further, mismatching of information provided in local and gateway EGM mainly occurs due to incorrect gateway port code in local EGM (error M), change in container for LCL cargo or mistakes committed while entering container number (error C), incorrect count of containers (error N), mistakes in entering the nature of cargo - LCL or FCL (error T), the let export order is given in ICES after sailing date of the vessel (error L), ICES has provision to correct all aforementioned errors.