Re-credit of ITC due to repayment of refund amount

[Priyesh Mamnani]

In 2019 my client has made export (with payment of tax) and made the payment of tax by using ITC. He has availed the refund of GST ₹ 5 lakhs in cash. The amount of export has not been realised from customer so my client decided to repay the refund back to the GST Department. How can we claim the credit back

1. Can we reclaim the amount of ₹ 5 lakhs as an ITC in GSTR-3B? or

2. Can we ask the department to re-credit the amount in electronic credit ledger?

[Rajagopalan Ranganathan]

Sir,

What is exported? If it is goods then it has been clarified by CBIC in its Circular No. 37/11/2018 GST dated 15.3.2018 that BRC (Bank Remittance Certificate) or FIRC (Foreign Exchange Remittance Certificate) is required only in case of export of services and not in the case of export of goods.

In my opinion, when you pay back the refunded amount you can take credit of amount debited in electronic credit ledger under intimation to jurisdictional GST officer.

[KASTURI SETHI]

Dear Querist,

In this scenario, you can take re-credit in GSTR-3B on your own. There is no time limit for re-credit of ITC. There is nothing to worry.

Still if you feel unsafe and you want to be doubly sure, you may write a letter to the jurisdictional Range Officer/Deputy Commissioner seeking permission for re-credit of ITC already debited.

First option is better from all angles.

[ABHISHEK TRIPATHI]

Dear Priyesh Ji,

Correct me if I am wrong, the querist has claimed refund of tax (IGST) on zero-rated supply. This must have been done u/s. 16(3)(b) of the IGST Act r/w. Section 54 of the CGST Act. Thereafter, querist deposited the amount to the department to the extent of non-realisation.

This is refund of IGST, not ITC. Querist cannot claim this as under GSTR 3B. This has to be done in accordance with Rule 96 r/w Rule 96B(2) of the CGST Act.

[Priyesh Mamnani]

Dear Abhishek Ji,

Your understanding is correct but I would like to note that the transaction is pertaining to year 2019 and Rule 96B came on March 2020. The client has decided to pay back the refund voluntarily. Now he wants to avail the credit again otherwise it will be loss of ITC for him.

[ABHISHEK TRIPATHI]

Dear Priyesh Ji,

The client may avail the credit, no doubt [See, limitation]. But, don’t you think this isn't the situation of re-credit of ITC? Because the credit was never availed, only the refund of IGST was sought.

AI Summary

Client Seeks to Repay 2019 GST Refund and Reclaim Input Tax Credit; Clarification on IGST vs. ITC Needed A client exported goods in 2019 using Input Tax Credit (ITC) and received a GST refund of 5 lakhs. Due to non-realization of the export amount, the client intends to repay the refund and seeks to reclaim the ITC. Responses suggest the client can re-credit the amount in GSTR-3B or inform the GST officer after repayment. However, one respondent notes this is a refund of IGST, not ITC, and suggests following specific rules. The client acknowledges the situation and seeks to reclaim the credit to avoid ITC loss.