ITC Refund

[Kaustubh Karandikar]

A 100% service exports company has gross billable income of 5.75 crores for FY 2018-19. It has LUT registration. Its total accumulated ITC for the year will be about 30 lakhs. It will be raising March 2019 invoices for this amount. However, since cash-flow wise, it does not need 5.75 crores as such, it may raise two invoices in march 2019 – one for say 2.50 cr. and another for 3.25 cr. Supposing by the time it files a refund application for ITC credits, only one invoice (3.25 ) has been paid (another may be paid a few months later), will it be granted full refund of ITC of 30 lakhs, or the refund will be pro-rated as 3.25:2.50?

AI Summary

ITC Refund Eligibility: Full Refund Only After Payment Realized in Convertible Foreign Currency for Export Invoices A company engaged in 100% service exports with a gross billable income of 5.75 crores for FY 2018-19, registered under LUT, has accumulated an ITC of 30 lakhs. It plans to raise two invoices in March 2019, one for 2.50 crores and another for 3.25 crores. The query concerns whether the ITC refund will be granted in full or pro-rated if only one invoice is paid by the time of filing. The response indicates that the refund can only be claimed after the payment is realized in convertible foreign currency.