Refund of export with IGST

[KARAN VERMA]

Sir

I m purchasing 70% raw material import on basis of license and not paying any custom duty and IGST. And my sale is also 90 % export.

For my 30% domestic raw material purchase, I m paying GST and also paying GST on local service provider.

My question in to extent of ITC accumulate for domestic purchase of goods and services, can I export goods with payment of IGST ( by utilising domestic input tax credit) and take refund of the same from custom.

[Rajagopalan Ranganathan]

Sir,

If you export under LUT, then you have to do the entire export without payment of IGST. Department will not accept export of goods partly without payment of IGST and partly with payment of IGST. Now you can do that. But there is no guarantee that the audit party deputed by the Commissioner or Comptroller and Auditor General of India will not make any objection to such procedure. Therefore it is better to discuss this matter with your jurisdictional GST Authorities before doing so. In my opinion it is better to claim refund of accumulated ITC after exporting without payment of IGST.

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[KARAN VERMA]

Sir, is there condition on assessee that he has to choose only one option either with payment of IGST or on LUT basis.

In my view, assesse can simultaneously use both options of export as per accumulated ITC.

[Ganeshan Kalyani]

Sir, he can opt either with payment of IGST or without payment of IGST. But both option cannot followed at the same time. How can you track the corresponding purchases to determine input tax credit and how will you justify your claim. Bit difficult.

AI Summary

Export under LUT requires exports without IGST; exporters should not mix LUT and IGST payment options for the same shipments. Exporters must choose between exporting under a Letter of Undertaking (LUT) without payment of IGST or exporting with payment of IGST and claiming refund; departmental practice discourages splitting the same consignments between the two routes because mixing options invites administrative scrutiny and creates difficulties in tracing and justifying input tax credit claims.