CBIC May Unlock Importers’ IGST Credits to Ease Tax Payment Hurdles
By Author / July 10, 2025
CBIC News | IGST News
Proposed SOP for Import-Related IGST Payments
The Central Board of Indirect Taxes and Customs (CBIC) plans to introduce a standard operating procedure (SOP) to help importers claim input tax credit (ITC) on IGST payments made post-Customs clearance. This move aims to address shortfalls often flagged during audits or compliance checks.
Government officials told Business Standard that this framework could release hundreds of crores in locked ITC. The measure will improve working capital flow for importers and reduce procedural delays.
Why IGST Credit Gets Blocked
Short payments of IGST on imports typically occur due to valuation issues, classification errors, or other filing discrepancies. Importers must pay the shortfall using a TR-6 challan, a manual receipt system still in use.
However, under the current system, these TR-6 payments are not linked back to the Bill of Entry (BoE). This break in data prevents the GST Network (GSTN) from recognizing these payments, which in turn blocks ITC eligibility.
System Integration in Progress
An official explained, “Previously, the API connecting Customs’ ICEGATE and GSTN couldn’t process post-clearance TR-6 payments. So, GSTN wouldn’t update the BoE with the revised IGST details. As a result, businesses couldn’t claim ITC.”
The government is now working to digitally integrate the Customs and GST systems. Once complete, TR-6 data will auto-update in Bills of Entry, making it easier for businesses to revise filings and claim credits. This integration also aligns India’s system with global tax standards.
Digital Platform and Voluntary Correction Framework
In parallel, CBIC plans to launch a digital portal allowing taxpayers to:
- Submit voluntary declarations
- Pay differential duties and interest
- Apply for refunds electronically
This step supports a recent Budget announcement, which proposed a legal structure for voluntary post-clearance corrections. The law will allow businesses to fix declaration errors, settle dues with interest, and recover excess payments.
Common Issues Faced by Importers
Taxpayers often struggle to revise BoEs, especially when cases involve:
- Transfer pricing adjustments
- DRI investigations
- End-of-year audit corrections
A senior official noted, “Manual processes have delayed credit claims and created unnecessary litigation. We aim to make the entire correction and refund workflow seamless.”
Experts Welcome the Change
Tax experts agree the integration is long overdue. One specialist remarked, “The TR-6 linkage will simplify ITC claims, particularly for reassessments that are otherwise unviable under current law.”
Another added, “The move could significantly ease working capital pressure on businesses, especially large importers handling complex filings.”
Conclusion
By improving system interoperability and offering a structured correction mechanism, CBIC is moving toward a more efficient, tech-driven tax framework. These changes are expected to reduce disputes, speed up refunds, and improve ease of doing business for importers.
