Refund of accumulated ITC - export of service w/o payment of IGST

[Vinay Kunte]

Hello

A tax payer who is a supplier of goods (manufactured as well as traded) and a service provider has supplied some of his services to a foreign Customer w/o payment of IGST under LUT (Export of services) and now intends to claim the Refund of accumulated ITC due to the export of services as per the formula given. It is understood that thee ITC on Capital goods cannot be part of the ITC refund to be claimed as the Refund is given only for ITC claimed on Inputs and Input services as per provision of law in this respect.

My query in this respect is that whether it is mandatory to prove the nexus / relation of the Inputs and input services related or required for provision of Services exported?

Can the entire ITC availed on inputs and input services received related for all the outward supplies made including GST Paid on Input Services covered under RCM, can be considered in calculation of eligible ITC and percentage of Refund available with respect ot the Export and Adjusted Turnover?

Can the Experts give me guidance in the matter please?

AI Summary

Taxpayer can claim ITC refund for exports without proving input-output nexus under Rule 89(4) formula. A taxpayer involved in supplying goods and services, who has exported services without paying IGST under a Letter of Undertaking (LUT), seeks to claim a refund of accumulated Input Tax Credit (ITC) due to these exports. The taxpayer queries whether it is mandatory to demonstrate a nexus between inputs and input services used for the exported services to claim the refund. An expert responds that proving such a nexus is not mandatory, as the refund formula under Rule 89(4) limits ITC refunds to the proportion of zero-rated supplies relative to the total adjusted turnover.