Query on GST refund

[KARAN VERMA]

The definition of Exempt supply includes Non taxable supply

Whether Non taxable supply include alcoholic liquor for human consumption.

If yes, whether i m eligible to take refund of GST paid on packaging material and CHA agent services in case of export of liquor.

[Mahir S]

Karanji, Board has issued circular no. 125/44/2019 dated 18.11.2019 stating that if assessee export exempted or Non GST goods then he is eligible for refund of ITC.

[KARAN VERMA]

Sir, whether liquor covered under Non gst goods. Kindly provide any legal reference.

[KASTURI SETHI]

Liquor is out of GST net by virtue of Article 366 (12 A) of Constitution of India.

[DR.MARIAPPAN GOVINDARAJAN]

As informed by Shri Sethi alcoholic liquor does not come under the purview of GST. Therefore he is not eligible to take refund of GST paid on packaging material and CHA agent services in case of export of liquor as per my view.

[KASTURI SETHI]

Liquor cannot be called non-taxable supply, it being non-GST item. There is a lot of difference between non-taxable and non-GST goods.

[KASTURI SETHI]

Dear Querist,

Pl go through the following:-

Relevant extract of Board's Circular No. 125/44/2019-GST dated 18.11.19

"49. As per section 16(2) of the IGST Act, credit of input tax may be availed for making zero rated supplies, notwithstanding that such supply is an exempt supply. In terms of section 2 (47) of the CGST Act, exempt supply includes non-taxable supply. Further, as per section 16(3) of the IGST Act, a registered person making zero rated supply shall be eligible to claim refund when he either makes supply of goods or services or both under bond or letter of undertaking (LUT) or makes such supply on payment of Integrated tax. However, in case of zero-rated supply of exempted or non-GST goods, the requirement for furnishing a bond or LUT cannot be insisted upon. It is thus, clarified that in respect of refund claims on account of export of non-GST and exempted goods without payment of Integrated tax; LUT/bond is not required. Such registered persons exporting non-GST goods shall comply with the requirements prescribed under the existing law (i.e. Central Excise Act, 1944 or the VAT law of the respective State) or under the Customs Act, 1962, if any. Further, the exporter would be eligible for refund of unutilized input tax credit of Central tax, State tax, Union Territory tax, Integrated tax and compensation cess in such cases."

As per above circular, in order to claim refund of tax paid on inputs contained in finished goods (exempted) exported, procedure has been laid down in Notification No.21/2004-CE(NT) dated 6.9.2004 has to be followed in terms of Board's circular no.928/18/2010-CX dated 28.6.2010. Thus rebate of tax paid on inputs only used for exempted exported goods is allowed.

In other words, refund/rebate of GST paid on packaging material and CHA services is NOT allowed.

Hence I support the views of Dr.Govindarajan, Sir.

[KARAN VERMA]

Thanks for your views. But my view is why VAT/Excise department provide refund to me because I have paid GST tax to GST department, then as per circular it is responsibility of GST department to provide refund to me. Although, I have to meet the export obligations as per VAT/Excise law.

[KASTURI SETHI]

Still CAG (A.G.Punjab) has not conducted audit of any unit after the implementation of GST. Wait and watch. Has CHA service been exported in this case ?

[KASTURI SETHI]

There are restrictions also on packing material and packaging material. State GST officers are committing Himalayan blunders. They do not know about the history of Central Excise Customs & Service Tax laws. It is a major drawback and handicap for them. Knowledge of previous laws is a must to learn the concepts of GST laws.

[Bhavika Chothani]

Alocoholic Liquor is Non-GST item. Hence the GST paid on packaging material and CHA Agent services in case of export of liquor cannot be claimed as ITC

AI Summary

Refund of input tax credit for exports of non GST alcoholic liquor excludes packaging and CHA services.
Alcoholic liquor is treated as a non GST item; exporters of non GST or exempted goods may be eligible for refund of unutilized input tax credit and need not furnish LUT/bond when exporting without payment of integrated tax, but refunds for packaging material and CHA services used in export of alcoholic liquor are not available and rebate follows pre GST rebate procedures under Central Excise/VAT rules.