Refund of GST

[BINDLAS DUPLUX]

Dear Sir(s)

A Trading company say Mr. X (deals in paper, paper machines etc.) purchased Kraft Paper (IGST @12%) from paper manufacturing company in India.

Thereafter Mr. X sold the goods to Mr. Y (merchant exporter) under not. no. 41/2017 Integrated Tax (Rate) Dt. 23.10.2017 charging 0.10 % IGST. Now the merchant exporter Mr. Y export the goods out of India.

My question here is that how Mr. X can claim the IGST which is unutilized.

thanks

CA Devkant Agarwal

[DR.MARIAPPAN GOVINDARAJAN]

Whether the company is paying any other integrated tax?

[BINDLAS DUPLUX]

Yes sir

Mr. X is dealing in taxable goods already n paying GST @ various rates on different products. this is the first opportunity to Mr. X to sell the goods to merchant exporter. Basically Mr. X pruchased the Kraft Paper by paying GST @ 12%.

Mr. X is trading firm and dealing in waste paper, finish paper, paper machine items etc.

thanks in advance.

[Yash Jain]

Dear Sir,

Yes, Mr.X can very well claim IGST Being paid on account of Export of Goods by Mr.Y (Merchant Trader - Procured Goods from Mr.X).

Mr.X can claim the Refund under Inverted Duty Structure Scheme (Were Goods being sold are charged at less tax rate in comparison to Input tax being availed for manufacturing/Purchase of Goods).

However he will be eligible for ITC only for (12%-.10% = 11.90%) under refund mechanism.

The calculation for Inverted duty structure in system enabled in GST Portal.

Regards

[BINDLAS DUPLUX]

thanks

[Yash Jain]

Sir,

But do ensure that you fulfill all the conditions as being laid for supply to merchant exporter.

Refer the notification for merchandise trade. There are some of the following conditions

1. Ensure that goods are exported in 90 days

2. Shipping bill should mention ur name.

3. You not being manufacturer will not get incentive/drawback

4. Your AO should be give PO by merchant exporter.

Many more conditions. Instead charge gst full @12%, and let merchant exporter take refund.

Rgds

[BINDLAS DUPLUX]

ok sir,

AI Summary

Inverted duty structure refund available for suppliers selling to merchant exporters when input tax exceeds tax charged, subject to conditions. A supplier who paid IGST on purchases and sold to a merchant exporter at a lower IGST rate can claim refund under the Inverted Duty Structure for the differential between input tax paid and tax charged on the sale, subject to GST portal calculations and compliance with documentary and procedural conditions such as export within the prescribed period, shipping bill naming the supplier, and required proof before the assessing officer.