XYZ imported goods and input tax credit taken on it for IGST charged in the Bill of Entry. These goods were rejected being wrong supply and re-exported to the supplier.
1) Can they claim input tax credit of IGST paid?
2) While re-exporting to the supplier, can they export without payment of GST under LUT even if they had taken input tax credit of the IGST?
Debate on XYZ's eligibility for ITC on rejected imports and re-export under LUT without IGST payment. XYZ imported goods and claimed input tax credit (ITC) for IGST charged on the Bill of Entry. These goods were rejected and re-exported to the supplier. The discussion revolves around whether XYZ can claim ITC on the IGST paid and if they can re-export without GST payment under a Letter of Undertaking (LUT). Yagay and Sun suggest that XYZ can claim ITC and export under LUT without IGST payment. Dr. Mariappan Govindarajan agrees with this view. However, HariKishan Bhonagiri argues that since the goods were not used for business, ITC eligibility is restricted, and ITC on imports cannot be claimed. (AI Summary)
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