Clarification on refunds under exports without payment of tax

[Rajendra Prasad]

Total sales value of exports without payment of tax under LUT-10Cr

Out of the above 5Cr value of exports(We recd goods from 0.1% sales under notification no.40/2017 Central Tax(Rate) dated on 23/10/2017)

Am I eligible for refund under exports without payment of tax under LUT on 10Cr under rule 89(4) of CGST rules, 2017???

[Rajagopalan Ranganathan]

Sir,

Asper sub-rule 4B of Rule 89 of CGST Rules,2017 "

[(4B) Where the person claiming refund of unutilised input tax credit on account of zero rated supplies without payment of tax has -

(a) received supplies on which the supplier has availed the benefit of the Government of India, Ministry of Finance, notification No. 40/2017-Central Tax (Rate), dated the 23rd October, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 1320(E), dated the 23rd October, 2017 or notification No. 41/2017-Integrated Tax (Rate), dated the 23rd October, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 1321(E), dated the 23rd October, 2017; or

(b) availed the benefit of notification No. 78/2017-Customs, dated the 13th October, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 1272(E), dated the 13th October, 2017 or notification No. 79/2017-Customs, dated the 13th October, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 1299(E), dated the 13th October, 2017,

the refund of input tax credit, availed in respect of inputs received under the said notifications for Export of goods and the input tax credit availed in respect of other inputs or input services to the Extent used in making such Export of goods, shall be granted.

In view of the provisions you are eligible to avail refund of tax paid under Notification No. 40/2017-C.T. (Rate) dated 23.10.2017.

[Venkataprasad Pasupuleti]

Dear sir,

You are eligible for making exports under LUT and claim the refund of unutilised ITC. There is no restriction in Section 54 of CGST Act, 2017 read with Rule 89 of CGST Rules, 2017 on claiming the refund of unutlised ITC even if benefit of Notification No. 40/2017- C.T (R) dated 23.10.2017 is availed.

What is restricted is only the option of making exports with payment of GST and claiming refund of such IGST. Refer Rule 96(10) of CGST Rules, 2017 as amended for this purpose.

AI Summary

Refund of unutilised input tax credit available for zero rated exports under LUT despite supplier notification benefits. Refund of unutilised input tax credit is available where zero-rated exports are made under a Letter of Undertaking and inputs were received on which the supplier availed a supplier notification benefit; the credit for those inputs and the proportionate credit for other inputs and input services used in making such exports shall be granted. The entitlement to claim unutilised ITC refund under LUT is not restricted by the supplier notification benefit, whereas claiming refund of tax paid on exports follows separate restricted provisions.