GST Refund in case of Service Export

[DEEPAK J]

Hello,

We are into business of services providing in India and outside India. We have taken input credit of ₹ 50 Lacs from Service Tax to GST by Tran 1. As we have less supply of services in india, Service Tax input which is taken in GST and GST input from july 2017 to present is accumulated in our gst credit account.

1) Can we claim refund of Service Tax Input which is taken GST by Tran 1 amount of ₹ 90 Lacs?

2) As per GST law, it says file refund with IFRC/BRC no in case of export of service of accumulation of ITC. Can we file with transaction advice ( it includes details of inward remittance) instead of IFRC/BRC because as per bank, IFRC is issued in case of FDI and BRC is issued in case of export of goods?

Thank you in advance!!

[SHARAD ANADA]

As per circular CGST 37/11/2018 dated 15.03.2018 para 8 you can not claim refund of Transactional credit. Para 8 is reproduce here under for your ready reference.

8. Refund of transitional credit: Refund of unutilized input tax credit is allowed in two scenarios mentioned in sub-section (3) of section 54 of the CGST Act. These two scenarios are zero rated supplies made without payment of tax and inverted tax structure. In sub-rule (4) and (5) of rule 89 of the CGST Rules, the amount of refund under these scenarios is to be calculated using the formulae given in the said sub-rules. The formulae use the phrase ‘Net ITC’ and defines the same as “input tax credit availed on inputs and input services during the relevant period other than the input tax credit availed for which refund is claimed under sub-rules (4A) or (4B) or both”. It is clarified that as the transitional credit pertains to duties and taxes paid under the existing laws viz., under Central Excise Act, 1944 and Chapter V of the Finance Act, 1994, the same cannot be said to have been availed during the relevant period and thus, cannot be treated as part of ‘Net ITC’.

[KASTURI SETHI]

Query-wise reply is as under:

1. I am of the view that you must file two refund claims. One for ₹ 50 lacs and Second for ₹ 40 lacs pertaining to pre-GST period and Post-GST period respectively. The refund claim of ₹ 50 lakhs will not be hit by the formula prescribed under GST regime. For this amount formula pertaining to pre-GST period will be applicable. It is not a small amount. You can get refund through litigation only. It is your substantive right. Duties /taxes have been paid by you. . You have complied with law by filing TRANS-1 and this goes in your favour.

Reply to query no.2 Yes, you can file. Relevant extract of Board's circular is appended.

Circular No. 37/11/2018-GST, dated 15-3-2018

F. No. 349/47/2017-GST

[NEERAJ KUMAR]

you can not claim refund of Transactional credit. Credit advice/ trancation advice is sufficient/fine. You can go thru Foreign Exchange Dealers’ Association of India

SPL -14/FIRC/2012

6

th February 2012

AI Summary

Business Seeks GST Refund for Accumulated Credit; Must File Separate Claims for Pre- and Post-GST Periods A business providing services both in India and internationally inquired about claiming a GST refund for an accumulated input credit of 90 lakhs. They sought clarification on whether they could file a refund using transaction advice instead of IFRC/BRC, as per GST law requirements. Responses highlighted that transitional credit refunds are not permissible under current GST regulations, referencing a specific circular. It was suggested to file separate refund claims for pre- and post-GST periods, emphasizing the need for litigation to recover the substantial amount. The use of credit advice was deemed acceptable for filing purposes.