Refund of accumulated ITC in case of export under LUT

[BalKrishan Rakheja]

Q1 Export was made in the month of July 2017 under advance authorisation scheme and also availed ITC in respect of goods purchased during the month of JULY 2017 whether I can claim refund of unclaimed ITC for the period of JULy 2017 in case I exported the goods under advance authorisation licence .The goods under advance authorisation were imported prior to GST regime and the same were used for export in the month of July 2017.

Q2. Our is a company having two unit i A & B in different state and engaged in the manufacturing same goods in both unit. The A unit purchased the goods from their unit B which is situated in another state on the IGST. A unit availed and utilized the ITC for the goods purchased from B. No payment of goods (including IGST) was made by A to B and more than 180 days lapsed. Whether deptt can ask for reversal or cn deny for ITC if payment not made by A to B.

[YAGAY andSUN]

Reply to Q1 : In our view since the inputs had not suffered duty therefore refund of accumulated ITC may not be available.

Reply to Q2: Yes department may ask to reverse the ITC along with Interest and after you make payment then you can avail it again.

[Ganeshan Kalyani]

Reply to query 2: In case of different factory of the same company there is no payment done for transaction done between them. In such case it is difficult to comply the payment provision.

[BalKrishan Rakheja]

Please refer to Querry No.2. Now the department is going to issue SCN in case of refund of accumulated ITC which was accumulated due to export under LUT , as we have not paid the payment to our other manufacturing unit as per povisions of ITC. Whether deptt's contention is correct?.

[Ganeshan Kalyani]

As per provision in GST Act the department 's contention seems appropriate .

[YAGAY andSUN]

Yes, Department has legitimate right to issue SCN and raise Demand along with interest.

[BalKrishan Rakheja]

Thanks everyone for their valuable opinion.

AI Summary

Accumulated input tax credit refund may be denied where inputs lacked duty and reversed if inter unit payment remains unpaid. Refund of accumulated ITC for exports under LUT may be unavailable where inputs did not suffer duty (for example, goods under advance authorisation imported prior to GST). If inter unit supplies led to ITC availed but payment was not made within the prescribed period, the department can require reversal of ITC with interest and withhold or deny refund until payment; issuing a show cause notice and raising a demand in such circumstances is a legitimate enforcement action.