Paying excess IGST

[Rajesh Kumar]

Sir , please inform what will be consequences when an exporter paying IGST on his goods on export @12% instead of 5% and taking IGST refund from Customs. Actually he is paying excess duty than applicable on the rate and taking IGST refund.

[Rajagopalan Ranganathan]

Sir,

As far as export of goods is concerned whatever IGST paid by exporter the same will be refunded. Hence the question whether you have paid excess IGST is not the concern of the Customs Officer who sanction the refund on line. Moreover the allegation that to claim more refund you have paid excess IGST will not hold water since whatever IGST paid by you will be refunded to you. Therefore you need not worry about payment of IGST at higher rate.

[KASTURI SETHI]

Such practice is legally wrong and should be stopped immediately. The department may consider such excess payment as modus operandi to encash accumulated ITC. You cannot pay any tax on your own volition.

You cannot pay tax more than than prescribed rate. You may invite interest and penalty.

[Atul Rathod]

Agree with Kasthuri Ji. Though there are favorable judicial pronouncement in Excise but in GST the said practice could lead to litigation.

[Adarsh Sharma]

Agree with Kasthuri Ji, department will take a stand that to encash the accumulated ITC you have purposefully paid IGST at higher rate and they will recover such excess along with interest

[Rajendra Prasad]

Dear Mr Rajesh,

Please stop this practise immediately, Agree with Kasthuri Ji

AI Summary

Exporter Warned Against Overpaying IGST at 12% on Exports; Potential Legal Consequences for Misusing ITC Highlighted An exporter inquired about the consequences of paying excess Integrated Goods and Services Tax (IGST) at 12% instead of the applicable 5% on exported goods and receiving refunds from Customs. One respondent indicated that Customs would refund any IGST paid, regardless of the amount. However, other participants warned that this practice is legally incorrect and could be seen as an attempt to misuse accumulated Input Tax Credit (ITC), potentially leading to interest, penalties, and litigation. They advised the exporter to cease this practice immediately to avoid legal repercussions.