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?

[Pavan Mahulkar]

it is not mandatory to prove the nexus / relation of the Inputs and input services related.

Formula prescribed u/r 89(4) itself restrict ITC refundable to the tune of Zero rated supply of Goods/Services,

By calculating ITC in proportion to Zero rated supply and total adjusted turnover...

[Vinay Kunte]

Thank you Sir for the confirmation.

AI Summary

Refund of input tax credit: refundable ITC for zero rated exports is calculated proportionally under the prescribed formula. Refund of accumulated ITC for export of services under LUT without IGST excludes ITC on capital goods and does not require proof of nexus between specific inputs/input services and the exported services. Refundable ITC must be calculated per the prescribed formula, restricting refund to the portion attributable to zero rated supplies by proportioning ITC against total adjusted turnover; this proportional approach applies to ITC on inputs and input services, including those under reverse charge, subject to statutory exclusions.