Refund under GST Act

[THYAGARAJAN KALYANASUNDARAM]

Dear Experts,

One of my client's importing goods and paying IGST regularly on the value fixed by the customs authority. Whereas while selling the same goods in the market its less than the value fixed by the customs authority. Due to which huge ITC got accumulated and as and when goods are imported he will sell it immediately and without retaining any stocks.

My query is that, how do we get the refund for the Excess ITC available which is not inverted duty or Zero Rated Sales?

What to do in this case.

Thanks in Advance.

[Rajagopalan Ranganathan]

Sir,

If the IGST paid on import is higher than tax payable for supply within India then it will be inverted duty structure. You are eligible for refund provided the refund is payable as per the notification issued. Input credit is eligible for refund only when the final product is exported out of India under LUT without payment of tax. If you supply the imported goods for consumption within India it will not constitute export and you are not eligible to claim refund of unutilised ITC. You have to forgo the excess ITC or utilise the same for discharging tax on outward sale.

[Venkataprasad Pasupuleti]

Dear sir,

Why valuation fixed by customs authority is high?

AI Summary

Client Seeks Refund for Excess ITC on Imports Under Inverted Duty Structure; Expert Outlines Eligibility Conditions A client is importing goods and paying IGST based on customs authority valuations, but sells them at a lower market value, leading to accumulated ITC. The client seeks advice on obtaining refunds for excess ITC that is neither from inverted duty nor zero-rated sales. An expert explains that if IGST on imports exceeds tax payable on domestic supply, it constitutes an inverted duty structure, allowing for refunds if conditions are met. However, refunds are typically available for exports under LUT without tax payment. For domestic sales, excess ITC cannot be refunded and must be used for other tax liabilities.