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Refund for Exporters – Duty Drawback Scheme

GST Refund for Exporters

– Duty Drawback Scheme
As per the GST framework, the GST acts as a consumption based 
tax and hence, the end customer becomes liable for the payment
of Goods and Services Tax. In the case of exports, the end
consumer of the goods or services would be not in India and GST

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12/23/22, 12:13 PM GST Refund for Exporters - IndiaFilings

would not be applicable. Thus, under the GST

(https://www.indiafilings.com/gst-return-filing) regime,
exports would be considered as zero-rated supply and exporters
are eligible to claim a refund of GST paid. In this article, we look at
the GST refund (https://www.indiafilings.com/gst-return-
filing) on exports and the duty drawback scheme.

Duty Drawback Scheme

Currently, the duty drawback scheme provides a mechanism for
neutralising customs duty, central excise and service tax on any
imported materials or excisable materials used or taxable services
used as input services in the manufacture of export goods. Under
GST, the duty drawback scheme would continue. However, the
limitation extends to the customs duties on imported inputs and
central excise duty on items specified in the Fourth Schedule to
Central Excise Act 1944 (specified petroleum products, tobacco
etc.) used as inputs or fuel for captive power generation.

Further, the duty drawback scheme shall continue and exporters

undertaking exports during this period can claim a higher duty
drawback. However, it may apply certain conditions such as no
input tax credit of CGST/IGST when claimed, no refund of IGST paid
on export goods when claimed and no CENVAT credit when carried
forward.

Claiming Higher Duty Drawback

During Transitional Period
In case an exporter claims higher duty drawback during the
transitional period, then a declaration from the exporter
and certificate from jurisdictional GST officer must be attached to
prevent double availment of neutralisation of input taxes. Similarly,
the exporter can claim the brand rate for Customs, Central Excise
duties and Service Tax during this period. Exporters also have the
option of claiming only the Customs portion of AIR and claim
refund/ITC under GST laws. 

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12/23/22, 12:13 PM GST Refund for Exporters - IndiaFilings

However, whenever a higher rate of drawback is claimed, the non-

availment of credit certificate is a mandatory document. Unless the
certificate is provided, the shipping bill will not move to LEO stage.
In such cases, to avoid unnecessary delay, exporters can amend
the shipping bill to claim a lower rate. The exporter can file a
supplementary claim as per the Drawback Rules at a later date
after obtaining the certificate.

Click here (https://www.indiafilings.com/learn/gst-rate-

customs-agents-cargo-handling-warehousing/) to read on GST
Rate for Customs Agents, Cargo Handling and Warehousing

Refund of IGST Paid for

Exporters
Under GST, exporters can claim a refund of IGST paid under one of
the following methods:

Without Payment of IGST

Under this method, the exporter can supply goods or services or
both under bond or Letter of Undertaking without payment of
integrated tax and claim a refund of a un-utilised input tax credit.
Under this method, the procedure to file refund has been outlined
in the Refund Rules under GST. The exporter claiming refund of
IGST will file an application electronically through the GST Common
Portal. Along with the refund application, export manifest or an
export report must be filed for the refund.

With Payment of IGST

Under this method, the exporter can supply goods or services or
both on payment of integrated tax and claim a refund of tax paid.
Under this method, the shipping bill filed by an exporter shall be
treated as an application for refund of integrated tax paid on the
goods exported out of India. The applicability of the application

shall apply only when the concerned individual carries out the
export goods files and the application or the individual files valid
returns along with the date of shipping bills or bills of export.

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12/23/22, 12:13 PM GST Refund for Exporters - IndiaFilings

For both methods, the exporters have to provide details of GST

invoice (https://www.indiafilings.com/learn/gst-invoice-
format-rules/) in the shipping bill.

Know more about imports under GST

(https://www.indiafilings.com/learn/igst-on-imports/) or GST
Bill of Entry format (https://www.indiafilings.com/learn/gst-
bill-of-entry/).

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