How to avail Input Credit

[Pinnacle PvtLtd]

Sir:

We are a BPO company having international clients. I mean we export our services and get billed in $. We have taken GST registration but not taken LUT since 2017. Currently we are having 50 lakhs as input credit which were accumulated since April 2019 till date.. I need your valuable suggestion regarding refunding of GST input credit..

Thanks,

Srinivasa

[KASTURI SETHI]

If you have all other export related proofs except LUT, non-filing of LUT cannot be the basis for rejection of refund claim. The purpose of filing LUT which is equal to Bond without security deposit is to safeguard Govt. revenue. If there is no revenue loss, Indeed the department may consider it as procedural lapse. If you have actually exported service and received foreign exchange, there should be no problem. You can also apply for waiver of LUT for the past period inasmuch as there is no logic to execute LUT for the past period especially in view of receipt of export proceeds.

[Shilpi Jain]

Agree with Kasturi sir. Please refer para 44 of Circular No. 125/44/2019-GST, dated 18-11-2019

The delay in furnishing of LUT in such cases may be condoned and the facility for export under LUT may be allowed on ex post facto basis taking into account the facts and circumstances of each case

So you could consider writing to the department for getting the delay condoned and file a manual RFD-11.

[Ganeshan Kalyani]

Sir, just to add to the reply given by experts, the input tax credit must be available in Electronic Credit Ledger to ask for refund.

AI Summary

Refund of input tax credit allowed despite delayed LUT filing if exports realised and ITC is in credit ledger. Non-filing of a Letter of Undertaking does not automatically preclude refund of accumulated input tax credit where services were exported and foreign exchange realised; LUT is primarily a revenue safeguard. Delay in furnishing LUT may be condoned and export under LUT allowed retrospectively; the taxpayer should seek waiver/condonation from the tax department and submit a manual RFD-11. The input tax credit must be available in the Electronic Credit Ledger as a precondition for claiming the refund.