Key Highlights of Circular No. 226/20/2024-GST

2025-03-04 06:34:09 02March

02March

Key Highlights of Circular No. 226/20/2024-GST

The Government of India, through Circular No. 226/20/2024-GST, issued on July 11, 2024, provides a mechanism for claiming refunds of additional IGST paid due to price revisions of exported goods. This addresses a significant gap in GST compliance, ensuring fair treatment for exporters who need to adjust prices post-export.<hr><h3>1. Background of the Issue</h3><ul><li>Some export contracts link product prices to international indices or allow post-export price adjustments.</li><li>If the price increases after export, the exporter must pay additional IGST.</li><li>Previously, there was no way to claim a refund of this additional IGST.</li><li>This circular introduces a structured process for exporters to claim refunds when IGST is paid due to an upward price revision.</li></ul><hr><h3>2. Process for Claiming Refund of Additional IGST</h3>✅ Exporters must file a refund application in FORM GST RFD-01. ✅ The claim will be processed by the jurisdictional GST officer instead of customs. ✅ Temporary filing method: Until a new category is created on the GST portal, exporters should select “Any other” and mention “Refund of additional IGST paid on account of increase in price subsequent to export of goods”. ✅ Supporting documents required:<ul><li>Shipping bill or bill of export</li><li>Original invoices</li><li>Contract or agreement justifying price revision</li><li>Debit note/supplementary invoices</li><li>Proof of additional IGST payment</li><li>Foreign Inward Remittance Certificate (FIRC)</li><li>Chartered Accountant (CA) certificate confirming foreign exchange receipt</li><li>Statements 9A & 9B of FORM GST RFD-01</li></ul><hr><h3>3. Key Guidelines for Refund Processing</h3><ul><li>The jurisdictional GST officer will validate the refund claim using shipping bill details and IGST refund data from customs.</li><li>The minimum refund amount is ₹1,000 (as per Section 54(14) of CGST Act).</li><li>Time limit for filing refund:<ul><li>Normally, 2 years from the "relevant date" (as per Section 54(1B)).</li><li>If the price revision happened before this circular, exporters get 2 years from July 11, 2024, to file claims.</li></ul></li></ul><hr><h3>4. Compliance for Downward Price Revisions</h3><ul><li>If an exporter reduces the price after export, they must deposit the excess IGST refund received.</li><li>GST officers will verify if exporters have paid back any excess IGST refunds before processing new refund claims.</li></ul><hr><h3>5. Implications for Exporters</h3>✅ Ensures fairness in refunding additional IGST payments. ✅ Prevents double taxation for exporters dealing with price-linked contracts. ✅ Customs officers won’t process these refunds; jurisdictional GST officers will handle them. ✅ Helps businesses maintain cash flow by ensuring IGST refunds are available when due.<a href="https://cms.plasament.com/storage/nisha/circular-no-226-2024.pdf">circular-no-226-2024</a>