which amount to be claimed as refund for accumulated ITC in case of export under LUT

[BalKrishan Rakheja]

One party is engaged in manufacturing and clearing the goods on payment of duty in DTA and under LUT for export. The party claimed refund of accumulated ITC for the tax period of July 2017 amounting to ₹ 1.62 Crores on 05.01.2018 after making debit entry of the amount claimed as refund. The party also made some more debit entry in the same month for refund claimed for the month of August and September also. Now the detail of the amount remained in the electronic credit ledger is as under:

1. Balance as on 31.01.2018 in the credit ledger after debiting the duty for the month of Decmber 2017 and debit entry made for three refunds is = ₹ 50 lacs only

2. Balance for the month of July after taking credit and debiting the duty (Tax period for which refund claimed) = ₹ 20 Lacs.

3. Refund amount claimed as per formula ₹ 1.62 crores.

I want to know which amount he is eligible for refund. In my view he is eligible for the amount mentioned in the Sr. No. 2 as per the sub section (3) of Section 54. Please give your valuable advise.

AI Summary

Refund of Input Tax Credit capped by statutory formula, GSTR 3B ITC declaration and electronic credit ledger balance.
Refund of input tax credit for zero-rated supplies under LUT is determined by a statutory formula that apportions net ITC to zero-rated turnover and adjusted total turnover for the relevant period. In practice the admissible refund is limited to the lowest of the formulaic refund amount, the ITC declared in GSTR-3B, and the balance available in the electronic credit ledger. A timing question about which ledger balance applies (period-specific balance or balance at filing) remains unresolved in the discussion.