Export Rebate not allowed if Drawback Claimed

[Praveen Nair]

It was brought to notice by one of the exporter that the department is not processing the IGST refund on exports if drawback is claim on such exports. Do you think this is right and under what condition?

[Alkesh Jani]

Sir, In this regards,Please refer 2nd Proviso to Section 54(3)(ii) of the CGST Act, 2017. A declaration to this effect forms part of FORM GST RFD-01A as well. I hope now it may clear for your. However, our experts may like to correct me, if mistaken.

[KASTURI SETHI]

An assessee cannot avail double benefit. It is very much clear as replied by Sh.Alkesh Jani Ji.

[Alkesh Jani]

Thank you Sir

[CSSANJAY MALHOTRA]

Dear Mr. Praveen,

Please do check with Exporter as to the IGST Refund period. If the same is from Oct 1, 2017 onwards, he will get IGST Refund and Drawback as Drawback rates consists of only "Custom Portion".

Prior to 01.10.2017, Drawback rates were of 2 types i.e. one with cenvat facility (lower rate) and another with out cenvat facility (higher rate of drawback). IGST refund was admissible if Exporter avails of lower rate and declaration to such effect is given at the time of filing of S/Bill.

[KASTURI SETHI]

Sh.CS Sanjay Malhotra Ji,. Sir Thanks for enrichment of my knowledge.

[Alkesh Jani]

Sir, in this regards, Circular No. 05/2018-CUS, Para 3 (d) is reproduced "d. Once all the invoices pertaining to Shipping Bill are verified by the officer, the system shall calculate the scroll amount against a shipping bill, after subtracting the drawback amount for each invoice where applicable, and display the refund amount to the officer for approval".

In view of above, it is clear that the amount of refund will be after subtracting the drawback, as there is no mentioned of lower or higher, I think even lower will be deducted. Please correct me, if mistaken

[YAGAY andSUN]

We endorse the very view of Mr. Jani.

AI Summary

Export refund adjustment: IGST refund must be reduced by drawback claimed, preventing double benefit per procedure. IGST refunds for exports are calculated after subtracting any drawback claimed on the invoices of the shipping bill; a declaration in the refund form evidences the claim and invoice verification precedes the system calculation so that the refund amount displayed for approval reflects the drawback deduction, preventing double benefit.