Application for Refund of ITC on Export of Goods & Services without payment of ITC

[VIRAF DEBOO]

We are manufacturer exporter registered under GST. We are exporting our goods to various countries. We want to know that, whether Application for Refund of ITC on Export of Goods & Services without payment of ITC under LUT as per Section 54(3) (i) and Rule 89(4) of CGST Act 2017 is compulsory / mandatory??
We have blocked / carry forward proportionate ITC in Electronic Credit Ledger as per formula given in Rule 89(4) of CGST Rules & to be applied for ITC refund in GST RFD-01A form on common portal. Kindly advice whether it is mandatory or optional ??

AI Summary

Manufacturers Exporting Under LUT: ITC Refund Applications Optional, Not Mandatory Under Section 54(3) & Rule 89(4) CGST Act 2017. A manufacturer exporter inquired about the necessity of applying for a refund of Input Tax Credit (ITC) on exports without IGST payment under a Letter of Undertaking (LUT) as per Section 54(3) and Rule 89(4) of the CGST Act 2017. Responses clarified that exporting can be done either with IGST payment claiming a rebate or without IGST under LUT, making the refund application optional. It was noted that while claiming the refund is beneficial, it is not mandatory. The discussion also highlighted the refund formula and its optional nature when exporting without IGST payment.