Revised definition of “Turnover of Zero-rated supply of goods” -ITC refund

[Narendra Soni]

Dear Experts

In case of ITC refund, refund is based on formula in which Zero rated turnover is required.Formula is (Net ITC*Zero-rated turnover/Total adjusted Turnover)

On 23.03.20, The CBIC vide Notification No.16/2020-Central Tax, has amended clause (c) of Rule 89 (4) which provides definition of “Turnover of Zero-rated supply of goods” and the amended definition is as under:

“(C) “Turnover of zero-rated supply of goods” means the value of zero-rated supply of goods made during the relevant period without payment of tax under bond or letter of undertaking or the value which is 1.5 times the value of like goods domestically supplied by the same or, similarly placed, supplier, as declared by the supplier, whichever is less, other than the turnover of supplies in respect of which refund is claimed under sub-rules (4A) or (4B) or both.”

Sir,

Vide this amendment, export value will be lower of actual export value and 1.5 times of domestic sale value.

It seen complicate definition,please suggest

1.What's meaning of' like goods domestically supplied by the same or, similarly placed, supplier, as declared by the supplier,'

2.Whether this definition is applicable for refund pending to file for tax period before March 2020, OR will be effective for refund of tax period March 20.i.e.from which tax period the notification is applicable.

3.We export 4 types of products, whether 1.5 times of domestic sale will be calculated for product wise or for total taxable value of domestic sale and how to compare it with export sale product wise or total export sale.

4.How it will be calculate.

We are to apply ITC refund application for tax period for the month of Jan 2020 hence please provide expert advice at the earliest.

AI Summary

Revised GST Rule for Zero-Rated Supply Turnover Sparks Concerns Over ITC Refunds and Potential Disputes Under Notification No.16/2020 A discussion on the revised definition of 'Turnover of Zero-rated supply of goods' for ITC refunds under GST, following Notification No.16/2020-Central Tax, highlights concerns about the amendment. The amendment specifies that the turnover is the lesser of the actual export value or 1.5 times the value of similar goods sold domestically. Participants query the applicability of this rule to past tax periods and its calculation method. Some experts suggest the amendment may lead to disputes, particularly if the actual export value exceeds the deemed export value. The need for clarity and potential for litigation are emphasized.