TaxTMI 
TaxTMI 
XYZ is an exporter of service. 1) Can he claim ITC on purchase of capital asset viz. Computers? 2) if yes, can he claim refund of such accumulated ITC claim since having continuous export of service?
Export of Service
03 Oct 2019 
4 Replies 
1114 Views Asked by
Input tax credit on capital goods: refundable credit not available for exporters using LUT; refunds limited to inputs.
Zero-rated supply status allows a registered exporter to avail input tax credit and to claim refund either under bond/Letter of Undertaking without payment of integrated tax or on payment with subsequent refund claims. However, the statutory refund calculation and the defined concept of net ITC confine refundability to credits on inputs, excluding accumulated credit on capital goods; therefore accumulated ITC on capital assets is not eligible for refund under the prescribed refund mechanism. (AI Summary)
Zero-rated supply status allows a registered exporter to avail input tax credit and to claim refund either under bond/Letter of Undertaking without payment of integrated tax or on payment with subsequent refund claims. However, the statutory refund calculation and the defined concept of net ITC confine refundability to credits on inputs, excluding accumulated credit on capital goods; therefore accumulated ITC on capital assets is not eligible for refund under the prescribed refund mechanism. (AI Summary)