Refund of IGST paid on export of goods.

[Narendra Soni]

Dear Expert, kindly suggest the meaning of below para of Rule 96, what is restriction for availing IGST paid refund from Customs ???

''The persons claiming refund of integrated tax paid on exports of goods or services should not have received supplies on which the supplier has availed the benefit of the Government of India, Ministry of Finance, notification No. 48/2017-Central Tax dated the 18th October, 2017 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R 1305 (E) dated the 18th October, 2017 or notification No. 40/2017-Central Tax (Rate) 23rd October, 2017 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R 1320 (E) dated the 23rd October, 2017 or notification No. 41/2017-Integrated Tax (Rate) dated the 23rd October, 2017 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R 1321 (E) dated the 23rd October, 2017 or notification No. 78/2017-Customs dated the 13th October, 2017 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R 1272(E) dated the 13th October, 2017 or notification No. 79/2017-Customs Tax dated the 13th October, 2017 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R 1299 (E) dated the 13th October, 2017.]

[Alkesh Jani]

Sir, In simple words it can be said that the exporter shall not avail the benefits as per the Notifications cited by you otherwise the refund of IGST shall not be granted. The double benefit cannot be availed.

At this juncture, I request the experts, that there is marginal benefits against, IGST. So my point of view is that refund should be granted after deducting the benefits availed, or else the taxes have been deemed to be exported out of India and is violation of International treaty. Please correct me if mistaken.

[CSSANJAY MALHOTRA]

Refund of IGST paid on export of goods is not available to Exporter if his SUPPLIER (not exporter himself) supplies goods to exporter by availing benefit as stated in referred notifications.

Alternatively benefit of Refund on Inputs and Input services is admissible under Rule 89.

[Alkesh Jani]

Sir, Refund of Input tax credit of goods exported cannot be claimed of goods are exported on payment of IGST.

[CSSANJAY MALHOTRA]

Dear Mr. Alkesh,

Please go through my reply once again, which says that if supplier avails benefit of stated Notifications, then IGST paid on Export of Goods is not available and person can alternatively go for Export clearances under Bond and claim Input / Input Services Tax Refund following Rule 89.

Everyone is aware of that only one refund claim can be seeked which can be either under Rule 96 or Rule 89 subject to the availment / non availment of benefit by supplier of goods against supplies to Exporter of goods.

[Alkesh Jani]

Dear Sanjay Sir,

Please comment on the second para of my first reply. I am very keen to know your views.

[CSSANJAY MALHOTRA]

Dear Alkesh,

First of all, the concept of refund claim is different alongwith the tax administration for processing of same, hence your view not acceptable from legal and administration perspective. Furthermore, no treaty is violated as no tax incidence is recovered from customers.

Act allows Exporter to claim back tax suffered on Exports either by way of input refund under Rule 89 or by way of Refund of tax paid on Exports (Rule 96).

 

AI Summary

IGST refund restriction: exporters cannot claim IGST refund if their supplier availed notified tax benefits, use input credit route instead. Exporters are not entitled to refund of integrated tax paid on exports if their supplier availed specified government notifications granting tax benefits; in that event the exporter must seek recovery through input tax credit refund mechanisms for inputs and input services rather than a refund of IGST paid on export, because the framework permits only one recovery route and bars double benefit.