Refund of ITC on export of liquor

[KARAN VERMA]

Dear Sir, i am exporting liquor which is Non GST goods. Now, Govt. has issued circular dated 18-11-2019 no. 125/44/2019 that if assessee export exempted or Non GST goods then he is eligible for refund of ITC.

My question whether i am eligible to take ITC on purchase of export packaging material and CHA agent services bill. Kindly clarify.

[Rajagopalan Ranganathan]

Sir,

As accepted by you liquor is Non-GST goods. Therefore input tax credit of tax paid on packing material is not allowed under GST Law. Hence the question of giving refund of tax paid on packing material does not arise. Though para 3 (l) of the circular mentioned by you permit filing of refund claim on account of “any other” ground or reason the refund sanctioning authority will not entertain such refund application. Moreover circulars issued by CBIC cannot override the provisions of CGST Act or rules made thereunder. Therefore in my opinion you cannot claim the refund of input tax credit of tax paid on the packing materil used for export of liquor.

[Rajendra Prasad]

Dear Mr Karan,

There are chances that you can get refund. Refund of ITC is applicable on Exempt Goods. The main reason for refund is to reduce the tax incidence there by exports become more competitive. You can represent that Exempt Supplies includes Non GST Supplies also.

AI Summary

Debate Over Input Tax Credit Refund Eligibility for Packaging Used in Exporting Non-GST Liquor Under GST Law An individual inquired about the eligibility for claiming an Input Tax Credit (ITC) refund on packaging materials and services related to exporting liquor, classified as Non-GST goods. One respondent clarified that since liquor is Non-GST, ITC on packaging materials is not permissible under GST law, and refund claims would likely be rejected. Another respondent suggested that refunds might be possible because the refund of ITC applies to exempt goods, arguing that exempt supplies could include Non-GST supplies. The discussion reflects differing interpretations of the circular and GST provisions regarding ITC refunds on Non-GST goods.