QUESTION  
 

A Rice Exporter sent a shipment without paying IGST ( not having LUT ) in Jan 2020 and filed GSTR1 WITH INVOICE NO  PTI/EXP001  and FILED GSTR3B with IGST amount as NIL.

Lateran in March 2020, he has again shown the IGST Amount in 3B AND MADE THE PAYMENT OF IGST DUE AMOUNT.

The GST Portal has transmitted the Invoice to ICEGATE with IGST NIL Value while there is Credit Balance against the 3B for March2020 AS SHOWN BELOW :

Search Result based on Financial Year : 2019-20 & Month: JANUARY

Data of valid export invoices provided in the return period has been transmitted/partially transmitted by the GST System to ICEGATE for further processing.

Particulars Count  Total IGST Amount (?) Total CESS Amount (?)
Total invoices processed from table 6A 1 0.000.00
Invoices transmitted to ICEGATE 1 0.00 0.00
Invoices not transmitted to ICEGATE 1 (SB/Port Code details are either missing or Port Code is incorrect)
                                                                 0 0.00                        0.00
Invoices rejected by ICEGATE 2 0 0.000.00

Since the Value Transmitted  to Ice gate IS 0.00 ( as per GSTR1 Value of Jan 2020   , so the Refund will not be Processed Unless the GSTR 1 is Amened and IGST Due Amount is Indicated Agains the invoice no.

It was Tried to amend the export invoice in June 2020 but the portal did not allow the amendment, as the invoice (with IGST Nil) has already been transmitted to Icegate .

Tte second options to show the same invoice again (with the changed prefix no of invoice no. PTI/EXP/0001  ) and same SB no in June 2020 GSTR1  and show the IGST amount so that export and show the IGST amount so that export refund is processed.

Please confirm that this second option will not result in additional demand of tax again for the Current year 2020-21.

What is the best way out to get the refund of tax paid by the exporter . 

ANSWER 
 

Facts of the case: Export was made in January without payment of duty in absence of a valid LUT and GSTR1 and 3B were filled showing export made without payment of tax.

· Later in the month of March taxable person uploaded export liability in 3B and it was paid.

       ·Now rectification in January Data is not allowed since it has been transmitted to ICEGATE portal and the taxable person wishes to claim the refund of export taxes paid in the month of march. 

Law Applicable:

·       As per clause (e) of subsection (8) to section 54 of CGST ACT the refund shall be granted in the following case

“ Notwithstanding anything contained in sub-section (5), the refundable amount shall, instead of being credited to the Fund, be paid to the applicant, if such amount is relatable to
(e) the tax and interest, if any, or any other amount paid by the applicant, if he had not passed on the incidence of such tax and interest to any other person”

Interpretation:

Considering the above situation we could suggest you two alternative courses of action elaborated below.

Alternative 1:

Claim refund of tax paid in March under section 54(8)(e) as tax wrongly paid. Do not associate this tax to be tax paid against export done in January. Simply state that this was tax paid in excess.
When you do this following repercussions will occur;

(i) und claim will be quickly granted since refund of excess tax is granted promptly.

(ii) Later on, in future, there is a possibility of receiving a Show Cause notice against Export done without payment of tax with invalid LUT.

In this scenario we advise you to go forward seeking mercy on the grounds of bonafide action. Since invalid LUT are merely a documentary lapse and all other procedural formalities in respect of the export shipment are complete.

In our practical experience we have witnessed cases of export with invalid LUT are dropped were easily since the officers take a lenient stand.

            Alternative 2:

File an application to ICEGATE for rectification of mistake and rectify the data if and when the portal allows. Although time consuming, but this is a full proof course of action. You will also need to amend your GSTR 1 and 3B through debit note. Also note that this course will lapse after the last date of rectify returns have ended under the GST Law.

Conclusion: You are at your will to use any of the above alternatives however we would suggest you go with Alternative 1. (Reply dt.07.08.2020)