Refund of IGST CGST for exporters

[Jasbir Uppal]

Dear Professionals,

The exporter had made export from the manufacturing of goods from the stock left on 30.06.2017 and claimed drawback on higher rate during the month of July 2017 to September 2017.

My query is Exporter who have not filed CENVAT returns because his manufacturing was exempt goods and he has not file Trans-1 in which CENVAT portion credit was in his CGST electronic credit ledger. Then how the exporter shall get refund of the CGST and IGST in the compliance with sec 16(3) of CGST Act, 2017 for the goods manufactured from the stock of 30.06.2017 and my goods are on consumption basis.

With Warm Regards

J S Uppal

Advocate

 

[Rajagopalan Ranganathan]

Sir,

According to Section 18 (d) of CGST Act, 2017 " where an exempt supply of goods or services or both by a registered person becomes a taxable supply, such person shall be entitled to take credit of input tax in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock relatable to such exempt supply and on capital goods exclusively used for such exempt supply on the day immediately preceding the date from which such supply becomes taxable."

Therefore I presume that the goods manufactured by you had become taxable with effect from 01.07.2017. Therefore you shaould have claimed the credit in respect of input stocks held as on 30.6.2017 by filing Tans-1. Now the last date for filing Trans-1 has expired and hence you cannot claim the credit taxes paid on stocks held as on 30.6.2017.

Moreover, according to Section 18 (2) of CGST Act, 2017 " a registered person shall not be entitled to take input tax credit under sub-section (1) in respect of any supply of goods or services or both to him after the expiry of one year from the date of issue of tax invoice relating to such supply."

Therefore the invoices issued by the manufactures of the inputs held in stock by you as on 30.6.2017 would have been issued prior to 30.6.2017. As on date according to Section 18 (2) you will not be eligible to take the credit since all the invoices would have been issued beyond one year from now.

Even if you move your jurisdictional High Court and claim any relief and if the relief prayed for is granted under Art. 226 the above provision will come in your way to claim the credit. In short at this point of time you cannot claim the credit of stocks held as on 30.6.2017. This is my opinion.

[DR.MARIAPPAN GOVINDARAJAN]

Shri Rajagopalan gave a splendid reply to this query.

[Nash Industries I Pvt Ltd]

Agree with Mr Rajagopalan.

Regards

S.Ramaswamy

[subramanian vijayakumar]

I agree with the views of the expert Rajagobalan sir

AI Summary

Input tax credit eligibility on pre transition stock denied where transitional filing was not made, blocking CGST and IGST refund. Entitlement to input tax credit for inputs and goods held in stock when an exempt supply becomes taxable required timely filing of the transitional declaration; failure to file that form bars claiming such transitional credit. Additionally, invoices for inputs issued before the transition date are subject to a one year limitation for claiming credit, so aged invoices will prevent recovery of input tax, together precluding refund or credit for CGST and IGST on goods manufactured from pre transition stock.