The Chamber of Small Industry Associations (COSIA) has raised serious concerns regarding the mandatory validation of Import IGST Input Tax Credit (ITC) against GSTR-2B under the newly introduced Annexure-B Offline Utility released by GSTN vide Advisory No. 660 dated 18 May 2026.
The new utility has been introduced to streamline the processing of refund claims relating to exports without payment of tax, supplies to SEZs, inverted duty structure refunds, and other categories involving accumulated Input Tax Credit. While COSIA appreciates the efforts of the GST Council and GSTN to improve transparency and automate refund processing, certain provisions of the utility may adversely impact genuine importers, exporters, and manufacturing MSMEs.
Issue Relating to Import IGST Credit
Under the revised utility, invoices uploaded for refund claims are validated against GSTR-2B data. This validation mechanism is also being applied to Bills of Entry relating to imports of goods.
COSIA believes that the treatment of Bills of Entry in the same manner as domestic supplier invoices raises significant legal and practical concerns.
Unlike domestic purchases, where a supplier uploads invoice details through GSTR-1 and such details subsequently appear in the recipient’s GSTR-2B, import transactions operate under an entirely different statutory framework. In the case of imports, IGST is paid directly by the importer through Customs, and the entitlement to Input Tax Credit is based on the Bill of Entry issued under the Customs Act, 1962.
The CGST Rules specifically recognize the Bill of Entry as a valid document for availing ITC on imported goods.
Concerns for Industry
Industry stakeholders have reported several situations where Bills of Entry may not immediately reflect in GSTR-2B due to reasons beyond the taxpayer’s control, including:
- Delays in transmission of data between ICEGATE and GSTN;
- Amendments to Bills of Entry;
- Customs broker data entry errors requiring correction;
- Technical issues in integration between customs and GST systems;
- Delayed updates arising from procedural or system-related reasons.
In such situations, taxpayers may have fully paid the applicable IGST, received the imported goods, and otherwise satisfied all statutory conditions for availing credit. However, the proposed validation mechanism may result in refund claims being flagged or rejected solely because of non-reflection in GSTR-2B.
For exporters and MSMEs, any delay in processing refunds directly impacts working capital and business operations.
COSIA’s Representation to Authorities
In view of the above concerns, COSIA has submitted representations to the relevant authorities seeking immediate corrective action.
The Association has requested that:
- Bills of Entry should be excluded from mandatory GSTR-2B validation requirements.
- Import IGST credits should be validated directly through ICEGATE data rather than GSTR-2B.
- Suitable clarification should be issued confirming that non-reflection of a Bill of Entry in GSTR-2B shall not, by itself, result in denial of eligible ITC or refund.
- Field officers should be advised not to reject refund claims solely on the basis of BoE-GSTR-2B mismatches where tax payment and eligibility are otherwise established.
Importance for MSMEs and Exporters
India’s MSME sector is a major contributor to exports, employment generation, and industrial growth. Timely refund of Input Tax Credit is critical for maintaining liquidity and ensuring competitiveness in domestic and international markets.
COSIA remains committed to working constructively with policymakers and tax authorities to ensure that technological advancements in GST administration are implemented in a manner that is legally sound, practical, and supportive of ease of doing business.
The Association is hopeful that the GST Council, GSTN, and the concerned authorities will take an appropriate view of the matter and issue necessary clarifications to safeguard the legitimate rights of taxpayers.
