recipient of deemed export

[ajay chharia]

purchased capital goods under EPCG scheme by paying IGST as recipient of deemed export . At the time of claiming refund with in relevant period the balance in IGST is nil whereas sufficient credit balance is available under cgst and sgst individually , but on submitting RFD-01A , it shows as there is no sufficient balance hence application not accepted. question is can`t I claim refund from cgst or sgst when igst is paid on deemed export . last column of application that igst has been paid on deemed export is filled automatically as it is linked with GSTR-1 of the supplier.

pl. reply

[Shilpi Jain]

The refund amount is to be calculated on the consolidated amount of ITC i.e. CGST + SGST and IGST. It should not be looked at IGST only separately in the instant case

Please refer para 37(a) of Circular No. 125/44/2019-GST, dated 18-11-2019

[Vijay kumar]

I think the procedure prescribed under para 37 of Circular 125/44/2019-GST dt.18.11.2019 is meant only for 3 categories of zero-rated supplies (para 3 -a,c and e) and is not meant for deemed exports. The following para is menat for deemed exports. Accordingly, please check whether you have fulfilled all the requisite conditions and procedure in this regard.

Guidelines for refund of tax paid on deemed exports

41. Certain supplies of goods have been notified as deemed exports vide notification No. 48/2017-Central Tax dated 18.10.2017 under section 147 of the CGST Act. Further, the third proviso to rule 89(1) of the CGST Rules allows either the recipient or the supplier to apply for refund of tax paid on such deemed export supplies. In case such refund is sought by the supplier of deemed export supplies, the documentary evidences as specified in notification No. 49/2017-Central Tax dated 18.10.2017 are also required to be furnished which includes an undertaking that the recipient of deemed export supplies shall not claim the refund in respect of such supplies and shall not avail any input tax credit on such supplies. Similarly, in case the refund is filed by the recipient of deemed export supplies, an undertaking shall have to be furnished by him stating that refund has been claimed only for those invoices which have been detailed in statement 5B for the tax period for which refund is being claimed and that he has not availed input tax credit on such invoices. The recipient shall also be required to declare that the supplier has not claimed refund with respect to the said supplies. The procedure regarding procurement of supplies of goods from DTA by Export Oriented Unit (EOU) / Electronic Hardware Technology Park (EHTP) Unit / Software Technology Park (STP) Unit / Bio-Technology Parks (BTP) Unit under deemed export as laid down in Circular No. 14/14/2017-GST dated 06.11.2017 needs to be complied with.

[ajay chharia]

thanks for reply.

I had duly considered all these circular and notification and complete the all procedural and legal requirement.My problem is I had purchased the capital goods under deemed export by paying IGST.At the time of claiming refund credit balance under IGST is nil whereas I had sufficient balance under CGST and SGST credit ledger to cover the amount of refund. At the time of submission of RFD-01 , the portal shows in red color that " Head wise column 4 amount cannot be greater than the balance in the respective head of column 2 and column 3". In this case RFD 01 take amount in column 4 directly from the Statement 5B, we can reduce this amount but cannot change the catogory from IGST to CGST or SGST. Please suggest...

AI Summary

Refund of tax on deemed exports: IGST-paid claims face head-wise ledger constraints though CGST/SGST credits exist.
Recipient paid IGST on capital goods under the EPCG scheme classified as deemed export but had nil IGST ledger and sufficient CGST/SGST credits; RFD-01 enforces head-wise balance checks based on statement 5B, preventing substitution of IGST claims with CGST/SGST. Deemed export refund rules permit recipient claims subject to undertakings that ITC was not availed and that supplier has not claimed refund, and procedural compliance under relevant circulars and notifications is required.