Complete guide on Refund in case of “Deemed Export”

As we have already discussed in our precious article regarding deemed export and also have seen that it is liable to GST. In this article, topics like procedure for supply to EOU, Refund claim and time limit for refunding claim etc, we are going to discuss the above concepts.

As it is cleared that Deemed export supplies are not zero-rated supplies by default.  All deemed export supplies will be subject to GST at the point of supply. Supplies cannot be made under Bond / LUT without payment of tax. Tax should be paid on such supply and then be claimed as refund.

Procedure for supply to EOU:

Government has issued circular no. 14/14 /2017 – GST dated 06th November 2017 which describes the procedure in respect of supplies to EOU/EHTP/STP/BTP units which can be understood with the help of following chart

Explanation:-

1. The recipient i.e. EOU/EHTP/STP/BTP unit shall give prior intimation in “FORM A”.
2. The registered supplier thereafter will supply goods under tax invoice to the EOU/EHTP/STP/BTP units.
3. On receipt of supplies, EOU/EHTP/STP/BTP units shall endorse the tax invoice and send a copy of the endorsed tax invoice to
4. a) registered supplier
5. b) the jurisdictional GST officer in charge of such registered supplier and
6. c) its jurisdictional GST officer.

4. The endorsed tax invoice will be considered as proof of deemed export supplies by the registered person to EOU/EHTP/STP/BTP unit.
5. The recipient EOU / EHTP / STP / BTP unit shall maintain records of such deemed export supplies in digital form, based upon data elements contained in “Form-B”. A digital copy of Form – B containing transactions for the month, shall be provided to the jurisdictional GST officer, each month (by the 10th of month) in a CD or Pen drive, as convenient to the said unit.

Refund:

As per Rule 89(1) of CGST Rules 2017 as amended by notification no. 47/2017-Central Tax dated 18th October which allows refund application to be filed by

1. Recipient of Deemed Export Supplies; or

1. Supplier of Deemed Export Supplies in cases where the recipient does not avail of input tax credit on such supplies and furnishes an undertaking to the effect that the supplier may claim the refund.

Documentary Evidence required to claim a refund:

In case the supplier is claiming a refund of tax paid on deemed exports, the following details/ documents must be produced:

Sr.No.	Documents Required
1.	A statement containing Invoice-wise details of deemed export supplies made by the supplier.
2.	Acknowledgement by jurisdiction tax officer of AA or EPCG holder that the said deemed export supplies have been received OR in case of EOU/ EHTP/ STP/ BTP/ Copy of tax invoice signed by the recipient that said deemed export supplies have been received.
3.	Undertaking by the recipient that no ITC has been claimed.
4.	Undertaking by the recipient that it shall not claim a refund in respect of such supplies.

We need to consider the amendment made vide notification no. 75/2017-Central Tax dated 29th December 2017 in respect of (4A) in the case of supplies received on which the supplier has availed the benefit of notification No. 48/2017-Central Tax dated 18th October, 2017, refund of input tax credit, availed in respect of other inputs or input services used in making zero-rated supply of goods or services or both, shall be granted.

Note: Further Rule 96(9) of CGST Rules 2017 as amended vide notification no. 75/2017-Central Tax dated 18th October 2017, recipient of deemed export supplies on which the supplier has availed the benefit of notification No. 48/2017-Central Tax dated 18th October, 2017 cannot export on payment of integrated tax.

Time Limit for Filling Refund Claim:

To apply for refund the recipient or supplier of deemed export supplies has to file an application in FORM GST RFD-01A through common portal before expiry of 2 years from the relevant date in such form and manner as may be prescribed- (Rule 54(1) of CGST Act 2017).

Relevant date for this is, the date when the return is furnished containing deemed export details.

Reporting requirements in GSTR – 1 and GSTR – 3B:

Deemed export supplies are required to be disclosed in Table 6C of Form GSTR – 1. The registered dealer has to give invoice details and tax paid on such supplies.

GSTIN of recipient	Invoice wise details			Shipping bill / Bill of export		Integrated tax			Cess
	No	Date	Value	No.	Date	Rate	Taxable value	Amt.
6C. Deemed exports

In Form GSTR – 3B, deemed exports are disclosed in Table 3.1 (b) with other zero-rated supplies.

3.1 Details of Outward supplies and inward supplies liable to reverse charge
Nature of supplies	Total taxable value	Integrated tax	Central tax	State / UT tax	Cess
(b) Outward taxable supplies (zero-rated)

Amendment in B2B deemed export invoices is required to be disclosed in Table 9A (B2B amendments).  Amendment in debit/ credit notes would be reported in Table 9C.

However, the taxpayer will still have the option to physically submit the refund application to the jurisdictional proper officer in FORM GST RFD-01A, along with supporting documents, if he so chooses. It may be noted that the documents/ undertakings/invoices to be submitted along with the refund application in FORM GST RFD-01A are the same as have been prescribed under the CGST Rules and various Circulars issued on the subject from time to time.