Refund on export of service

[samanthapudi venkaiah]

The dealer is dealing with 100% export of services.Thereis is un-utilised IGST ITC which the dealer claimed refund on export of services.Export Payments for export of services are received in subsequent month. Dealer applied refund for two months where there is Export Turnover and refund. As per the formula Net refund (A) =Net itc (B) XT.o of zero rated supply of goods (C) + T.o of zero rated supply of services (D) / Devided by Adjusted total turnover (E) (b).The Assessing authority interpreted rule 89 (4) (E) (b) and treated the services supplied for export for which considering is pending receipt as 'Non-zero rated supply of services' as a result the quantum of refund is significantly reduced. Please provide if there are any notifications /clarifications/ Case laws in this regard.

AI Summary

Refund Dispute: Dealer Challenges Reduced IGST ITC Refund on Export Services Due to Pending Payments Under Rule 89(4)(E)(b) A dealer involved in 100% export of services sought a refund for unutilized IGST ITC on exports, with payments received in subsequent months. The dealer applied for refunds over two months, but the assessing authority interpreted Rule 89(4)(E)(b) to classify services with pending payments as 'non-zero rated,' reducing the refund amount. Respondents argued that services should not be treated as non-zero rated simply due to pending payments, emphasizing consistency in classification and suggesting that common sense should guide interpretations rather than relying solely on circulars or case laws.