REFUND OF ITC

[unni kv]

Sir,

We are the exporter without payment of duty (against LUT). We are availing draw back with lower rate against each export shipment. Now my question is since our local sales volume is very low, the output tax liability is limited and as a result ITC is accumulated in the Electronic Credit Ledger. We were filed GSTR 3B till October 2017 alongwith making payment of ITC on RCM also.

My question is whether we can claim for refund of credit balances lying in Electronic Credit Ledger in view of claiming drawback with lower rate (i.e 1 to 2%) through RFD-1A ?

regards

[KASTURI SETHI]

If your ITC is accumulated because of export and you are unable to use, you can claim refund.

[KASTURI SETHI]

Drawback claim is not hurdle in this refund claim.

[SHIVKUMAR SHARMA]

Please refer Section 54(3) of CGST 2017.

[CSSANJAY MALHOTRA]

Please refer to Para No 2.4 Circular No 17-GST dated 15 November 2017.

http://www.cbec.gov.in/resources//htdocs-cbec/gst/Circular%20No.%2017-GST.pdf

[Nash Industries I Pvt Ltd]

When the exports is more compared to domestic sales, it is advisable to opt for export on payment of IGST and claim refund of IGST which is faster and simpler when compared to the refund of the input ITC.

Regards

S.Ramaswamy

[Ganeshan Kalyani]

The circular gives detailed information on claiming refund on zero rated sales. I agree with the opinion given by Sri Ramaswamy Sir that it is better to pay IGST on export and claim refund.

AI Summary

Refund of Input Tax Credit available to exporters using drawback; paying IGST and claiming refund may be faster. Exporters making zero-rated supplies under LUT who avail concessional drawback and thereby accumulate input tax credit in the Electronic Credit Ledger may claim refund of the unutilised ITC; claiming drawback does not bar such refund. Statutory refund provisions and administrative circulars set out the applicable procedure and documentation for refund of ITC on zero-rated supplies. As an operational option, exporters may instead export under payment of IGST and seek refund of the tax paid, a route often considered faster and simpler than refund of accumulated ITC linked to drawback.