CBIC Announces PAN-Based Refund Clearances for Exporters in India

June 8, 2018 Posted by India Briefing Written by Dezan Shira & Associates Reading Time: < 1 minute

The Central Board of Indirect Taxes and Customs (CBIC) announced this week that it will enable the clearance of Goods and Services Tax (GST) refunds based on PAN of exporters.

The move will bring much relief to exporters whose refunds have been held up because of a mismatch in the GST identification number (GSTIN) mentioned in the shipping bill and return forms GSTR-3B or GSTR-1. (Due to the mismatch in information, the GST system throws up an SB005 error.)

Tax

As much as US$2.07 billion (Rs 140 billion) worth of refunds – owed to exporters – have been stuck for several months, leading the CBIC to organize a second special refund period from May 31 to June 14, 2018 to fast-track the clearance of dues. (This is now extended to June 16, 2018.)

A mismatch in the GSTIN can happen when the entity drawing up the shipping bill is a registered office and the entity that has paid the integrated tax (IGST) is a manufacturing unit.

The CBIC has also introduced a manual facility to correct the mismatch in the invoice details in shipping bills and GST returns. Exporters can opt for this manual correction for shipping bills dated till April 30, 2018.

It is recommended that exporters avail the chance to align their export invoices submitted to customs and tax authorities for smooth processing of refund claims in future.

The CBIC has also released a notification explaining why exporters may be facing a blockage on their refunds, and the procedure to redress it. (See official circular here.)

Among other things, exporters should note that the IGST amount mentioned in the form GSTR 3B must be equal to or more than the IGST mentioned in Table 6A of form GSTR 1.

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