Sale against EPCG and invalidation letter

[Manish Sulakshane]

Dear Sir

We are manufacturer of Finned Tube Heat exchangers used in Refrigeration and Air conditioning Industries.

The sale of our Products attracts GST @28 % earlier and as per the recent Council meets held at Gauhati last week, it has been reduced to 18%.

One of our Customer who wishes to buy the Units from us has informed that they would be submitting us EPCG license along with invalidation letter and accordingly the material is to be to be considered at Deemed export and GST charges to be NIL.

Can you please clarify whether GST is applicable on sale against EPCG and invalidation letter.

AI Summary

GST Applies to Deemed Exports for Finned Tube Heat Exchangers; Refund Mechanism Available for Tax Neutralization A manufacturer of Finned Tube Heat exchangers inquired about the applicability of GST on sales against an EPCG license and invalidation letter, which a customer suggested should be treated as deemed exports with no GST. Three responses clarified that GST is indeed applicable on such transactions, as there is no exemption under GST for deemed exports. However, a refund mechanism is available, allowing either the supplier or recipient to claim a refund, thereby neutralizing the tax impact through Input Tax Credit (ITC) or refund.