Compliance
Why your IGST refund and export incentives are stuck
The common reasons refunds, drawback and RoDTEP are held, and what to ask your team and your CHA.
Contents
- When you export on payment of IGST, the refund is processed automatically. It only stops when something does not match.
- The usual causes are small: an invoice number, a GSTIN, a missing return or an unvalidated bank account.
- Most stuck refunds can be fixed. The real loss comes from not knowing they are stuck.
How the refund is meant to work
If you export goods on payment of IGST, your shipping bill is treated as your refund claim. Customs takes the invoice details from your shipping bill and matches them with the invoice you reported in your GST return. If everything matches and the export is complete, the refund is sent to your bank account.
No application, no follow-up. That is the design. So when a refund does not arrive, it is almost always because one of the matches failed.
The common reasons a refund is held
The invoice number or date does not match. The shipping bill shows "EXP/123/26-27" and the GST return shows "EXP123". To you, the same invoice. To the system, two different invoices. This is the most common reason of all.
The GSTIN does not match. The GSTIN on the shipping bill differs from the one that filed the return. This happens when a business has more than one registration.
The return was not filed, or the export was not shown in it. The invoice must be reported in the export section of your GST return, and the monthly summary return must be filed for that period.
The shipment is not complete in the customs system. The shipping line or agent must file the export manifest. Until it is filed, the refund cannot move.
The bank account is not validated. The refund goes to the account registered with customs. If that account has not been validated, the money has nowhere to go.
The IGST amount differs. The tax shown on the shipping bill and in the return must agree.
What about drawback and RoDTEP?
Duty drawback and RoDTEP depend on the shipping bill too. The rate depends on the tariff line of your product. If your invoice and your CHA use different HS codes, you may receive a lower rate, or face questions. RoDTEP must also be claimed on the shipping bill itself. If it was not claimed when the shipping bill was filed, it is hard to recover later.
Rules and rates for these schemes change. Check the current position for your products with your CHA.
Why owners do not see it
Refunds do not appear in your sales ledger. Nobody chases them the way they chase a buyer. A stuck refund simply sits in a government portal, and the team assumes it is "under process".
Meanwhile, the money is yours. Exporters who check often find refunds held for months for a reason that took ten minutes to fix.
How Expodite helps. Expodite keeps the invoice number, date, GSTIN and HS codes in one shipment record. Before the shipping bill is filed, it checks the CHA's checklist against that record, field by field and line by line, including the invoice number, value and whether the export is under LUT or on payment of IGST. Mismatches that would hold your refund are caught before filing.
See Expodite's export compliance softwareQuestions to ask your team and your CHA
- How much IGST refund is pending today, and since when?
- For each pending refund, what is the reason shown on the customs portal?
- Do our invoice numbers appear exactly the same on the shipping bill and in the GST return, including slashes and prefixes?
- Is the bank account registered with customs validated?
- Who checks this every month, and who do they report to?
Quick answers
- Why is my IGST refund on exports not credited?
- Usually because the invoice details on the shipping bill do not match the GST return, the return was not filed, the export manifest was not filed, or the bank account is not validated.
- Can a stuck IGST refund be fixed?
- In most cases, yes. Your CHA and chartered accountant can correct the mismatch through the process customs allows. The sooner it is found, the easier it is.
This article is general information for Indian exporters. It is not tax or legal advice. Check current rules with your chartered accountant and CHA.
