Nisha Verma – Joint Commissioner, IRS, Indian Customs, Drawbacks, Bonds resolved a two year pending IGST refund matter within 2 hours
In December 2021, ALPS Enterprises (a company owned by myself in India) had exported goods worth over 1 crore rupees from India to Israel. Export is Zero rated supply under GST Regime in India and can be done with two methods;
1) On payment of GST (IGST) and get it refunded on successful export through automatic route, and
2) Without payment of GST (IGST) by filing Letter of Undertaking or Bond.
In both the cases, the burden of tax is not passed on to the foreign customers as it ultimately does not become a cost to the exporter.
In first method, In case of export of goods with payment of tax, separate refund application is not required as the Shipping Bill itself is treated as refund application. Shipping Bill is a statutory document which is filed to clear the goods for export. As soon as the details entered in the GST Return through Form GSTR-1 and it matches with the details mentioned in the shipping bill filed with ICEGATE(Indian Customs Electronic Commerce Gateway), ICEGATE starts processing the refund and crediting it to the bank account mentioned by the taxpayer on the portal.
In second method, an exporter needs not to pay GST on export made from India. But in such a case accumulated Input Tax Credit (ITC) may available in exporter’s Electronic Credit Ledger of GST Account which will be available for refund. Such refund will be claimed by exporter by filing refund application on GSTIN Portal. Such ITCs are available on purchase of items from Indian suppliers.
For this export, our company’s appointed CHA (Customs Handling Agent) in India exported the goods under LUT instead of paying IGST. Everything went smoothly and the shipment was cleared to make exports hassle free.
But trouble awaited us. While filing GST Return a huge mistake was made and all the complications began. As a compliance every GST registered person is required to file GST return on due date. We were doing the same after exporting. But we made a mistake – we paid IGST while filing this return even though we exported under LUT. This amount was a huge amount. We paid Rs. 17,69,295 from our pocket.
Later our CA (Chartered Accountant) found out about this huge mistake. We had exported under LUT and as a rule we didn’t have to pay anything but on the other hand we paid a huge amount. Now the struggle to get it refunded from the custom has started.
ICEGATE had processed the Shipping Bill and Scroll amount has been calculated in their system as Zero. But at a later stage you paid a huge amount as IGST to customs through ICEGATE.
ICEGATE is India’s unmanned and no human intervention defined online portal where your company needs to file and declare the IGST amounts and also file here for the refund amounts on exports. It is noted here, if the ICEGATE and GST Return for a particular Bill of Export does not match, the ICEGATE system will show error and the GST refund will never get processed. In ICEGATE the GST amount through Shipping Bill was processed as Zero and we have filed GST amount as Rs. 17,69, 295 through GST Return.
After spending 2-3 months on this matter with our company’s CA he didn’t find any solution to this problem. Amendment on ICEGATE portal was impossible to do as it’s a completely online system without any manual intervention. Our second option was to get the Shipping Bill of Export amended from the Indian Customs. As per Indian Customs an amendment of shipping bills is not very straightforward and easy to do once the goods are exported outside India. So this option also failed after making several consultations with GST and Customs experts in India.
Now after many failed attempts and disappointments from everywhere, around 8 months later I got in contact with Mr. Nand Jee Singh, Owner and MD of EXIM Clinic. They specialize in handling export and import matters for several clients in India. The reference of Mr. Singh came to me through a very well-known and higher designation person at FIEO (Federation of Indian Export Organisation).
Mr. Singh and his team tried relentlessly for over 8 months trying to resolve the issue. They did several meetings with many officers at Customs and GST departments, and everyone was only trying to understand the problem and give an understanding of some possible solutions. Since the issue was between ICEGATE, GST and Customs, there was not any definite answer or solution. After doing deep research on the subject, Mr. Singh found the root cause of this problem. The real problem was that ICEGATE had already processed our export bill on zero IGST amount so ICEGATE rejected the amended record by considering it as duplicate refund claim. Because ICEGATE is no human intervention system hence for it, refund process does matter not the amount. Now Mr. Singh has identified the problem so he got one possible solution of removing the error code manually in the system of the Indian customs. This change could only be done by a competent officer in charge not below rank of Assistant Commissioner. Mr. Singh had found the concerned officer who could help us in this matter.
Now after almost a year waiting for the refund I got very frustrated and annoyed with the entire Indian customs, GST and its working. I decided to travel to India and meet some top officers at the Indian Customs pleading for help. On 16 November 2022, I landed in New Delhi and headed straight to the Delhi Customs House near IGI Airport. I met Mr. Singh at the entrance gate and we both headed straight to meet Ms. Nisha Verma – Deputy Commissioner, IRS, Indian Customs, Drawbacks, Bonds.
Ms. Verma invited us inside and carefully understood the entire matter. With great confidence Ms. Verma said give me 1 hour to find out what can be done from her side to resolve the matter and she requested us to come back exactly in one hour. This was the first time in my life I’d seen an officer with so much confidence and professionalism. From her face anyone I could gauge that she understands the matter very well and knows how to either resolve the issue or give it the right direction.
After 1 hour, around 4.30pm, Mr. Singh and myself went back to Ms. Verma’s cabin and took seats in front of her. With a very gentle smile and graceful face she said to me, your problem is resolved we will remove the error code manually in our system and my company shall receive the entire refund within 3-4 days. After hearing her words I was mind blocked for a second and I couldn’t believe what she just said. After taking a brief pause, I thanked Ms. Verma wholeheartedly for her generosity in kindly hearing about our problem and her wisdom in resolving the matter.
While we were waiting for the Indian customs portal to manually update their system. Ms. Verma shared with us, how she has managed to promptly clear over 80% pending refund cases within a span of 3 months from her joining as the commissioner. She mentioned to me “not a single case that comes to me in the morning goes unresolved or unattended the very same day”. Ms. Verma also shared a bit about her philanthropist activities where she is educating many young girls in her native and is also helping many youngsters with guidance on clearing Civil Services Exams. I literally wanted to stand up and salute her, for her kindness and help with resolving the matter, but I held back, not overdoing with my emotions in front of a top level government officer.
I returned back to Mumbai the very same day, super happy and excited to have met and interacted with this angel in the Indian Customs Department. My company received the refund amount in our bank within 3 days. As many say ‘where there is a will there is a way’ and this was proven absolutely correct.
I personally want to thank the Indian Customs for hiring this most deserving person Ms. Nisha Verma as the Deputy Commissioner.
I am sure if anyone needs to approach Ms. Nisha Verma directly at New Customs House in New Delhi, India, she would be more than happy to extend her full help within her capacity.
Thank you Ms. Nisha Verma once again.
Article written by :
Gaurav Pardeshi, Founder and Director of ALPS Enterprises India
