Query on GST Refund

[VENKAT S]

A Company's main operations are export of services(zero rated).Company has LUT also. Company has GST input in electronic credit ledger pertaining to FY17-18. Now can the company raise an invoice with GST (for export of service) , adjust the input available and claim the same as refund ?

[Rajagopalan Ranganathan]

Sir,

There is no time limit to utilize the input credit. Therefore you can utilize the input credit earned in 2017-18 now for payment of IGST on export of service and can claim the same as refund. However the Department may raise an objection that you have executed LUT and you can export without payment of IGST. For the reason of encashing the input credit earned in 2017-18 you are exporting the service on payment of IGST. Moreover the refund claim will be treated as time barred.

[Shilpi Jain]

There is no time limit for utilization of credit under GST. Further there is no condition that the tax paid on export of service should not pertain to past years. Also, merely having taken LUT will not mean that you cannot export with payment of tax. So in my view you can proceed to export with payment of tax to encash the past credits since there is no specific restriction in the law.

[Prakash and Thiagarajan]

In case you have capital goods credit, it is better to pay IGST and claim the refund than go for un-utilized ITC refund.

[Ganeshan Kalyani]

Yes, you can do export with payment of IGST and claim refund thereof.

[Bhavika Chothani]

Yes the company can do so

AI Summary

Input tax credit utilization permitted for past-period credits; exporters may pay IGST and seek refund despite having LUT.
A taxpayer exporting services may utilize prior-year input tax credit to pay IGST on exports and claim refund; execution of a Letter of Undertaking does not bar exporting on payment of IGST. There is no statutory time limit on the utilization of input tax credit, though tax authorities may raise objections that a refund claim is time-barred or question payment after furnishing an LUT. Credits relating to capital goods may influence whether to pay IGST and seek refund or pursue an unutilized credit refund.