GST Refund for Export And Supply To SEZ

The GST Council applied 'zero' rated GST as per IGST Act, 2017 for Exports and supplies to special economic zones. Zero rating means that the entire supply chain of a particular “zero-rated supply” is free of GST. However, in the case of exempted supplies, GST exempts only the output but GST shall apply on the input side. The quintessence of zero rating helps Indian businesses compete globally on the international market as it ensures that tax does not get added to the cost of exports. A person having GST registration making a zero-rated supply is eligible to claim GST refund in accordance with the provisions of the CGST Act, 2017. The below mentions the two options below:

Supply of goods or services under Bond or Letter of Undertaking without payment of integrated tax and claim refund of unutilised input tax credit of CGST, SGST / UTGST and IGST; or
Supply of goods or services with payment of integrated tax and claim of GST refund on tax paid.

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GST Refund on Exports

o claim GST refund, the following conditions must be satisfied by the taxable person registered under GST:

The person in charge of the conveyance carrying the export goods duly files an export manifest or an export report covering the number and the date of shipping bills or bills of export.
The applicant has furnished a valid return in Form GSTR-3 or Form GSTR-3B, once the shipping bill and export general manifest (EGM) is filed and a valid return is filed, the application for refund will be considered complete and refund process will commence.

In case of service exporters, a statement containing the number and date of invoices and the relevant Bank Realisation Certificates or Foreign Inward Remittance Certificates along with the refund claim must be submitted.

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Refund Policy on Supply to SEZ

The taxpayer can file the application for supplies to a Special Economic Zone unit or a Special Economic Zone developer by:

Supplier of goods after such goods have been admitted in full in the Special Economic Zone for authorised operations, as endorsed by the specified officer of the Zone;
Supplier of services along with such evidence regarding receipt of services for authorized operations as endorsed by the specified officer of the Zone.

To claim refund on supply to SEZ, the following documents and information must be submitted:

Proof of receipt of goods or services as demonstrated by the specified officer of the SEZ.
A statement containing the number and date of invoices, the evidence regarding the endorsement SEZ Officer and the details of payment.
A declaration to the effect that the Special Economic Zone unit or the Special Economic Zone developer has not availed the input tax credit of the tax paid by the supplier of goods or services.

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GST Provisional Refund

Taxable persons making zero-rated supplies will be eligible for a provisional refund of 90% of the claim in terms of CGST Act, 2017. The CGST Rules, 2017 states 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 should reflect in Form GST RFD 04 with payment advice in the name of the claimant. The GST provisional refund amount will be electronically credited to the taxable persons bank account mentioned on the GST Portal. Provisional refunds 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.

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Frequently Asked Questions

Common questions about GST Refund for Exports and SEZ Supply in India.

Zero-rated GST means that the entire supply chain of exports and supplies to Special Economic Zones (SEZs) is free of GST. This ensures that no GST gets added to the cost of exports, helping Indian businesses compete globally in international markets.

A registered taxable person making zero-rated supplies has two options to claim GST refund: (1) Supply goods/services under Bond or Letter of Undertaking without paying IGST and claim refund of unutilized input tax credit, or (2) Supply goods/services with payment of IGST and claim refund of the IGST paid.

To claim GST refund on exports, the person in charge of the conveyance carrying the export goods must file an export manifest or report covering the shipping bills/bills of export. The applicant must also file a valid GSTR-3 or GSTR-3B return.

Service exporters must submit a statement containing the number, date of invoices, and relevant Bank Realization Certificates or Foreign Inward Remittance Certificates along with the refund claim.

To claim GST refund on supplies to SEZ, the supplier must submit proof of receipt of goods/services endorsed by the specified SEZ officer, a statement containing invoice details and payment evidence, and a declaration that the SEZ unit/developer has not availed input tax credit.

Taxable persons making zero-rated supplies are eligible for provisional refund of 90% of the claim amount. The provisional refund should be granted within 7 days from the date of acknowledgment of the refund claim.

Provisional GST refund is not granted if the person claiming refund has been prosecuted for any offence under the GST Act or earlier law involving tax evasion during the preceding five years.

The article suggests that GST refund process can be made easier by seeking assistance from GST experts at IndiaFilings, which provides reliable and quick services related to GST refunds.

The endorsement by the specified SEZ officer acts as proof that the goods/services have been admitted in full in the SEZ for authorized operations, which is a necessary condition for claiming GST refund on such supplies.

Yes, filing a valid GSTR-3 or GSTR-3B return is a mandatory condition for claiming GST refund on exports, along with the export manifest/report being filed by the person in charge of the conveyance carrying the export goods.