Refund on zero rated supply

[Sudhir Kumar]

I have received input for making final goods to export. On such inputs I have paid IGST worth of Rs, 50 lacs approx. The gross invoice value of inputs are more than 4 crore Rs.

After preparing final goods, I have issued an Invoice of such goods for export. The outward supply invoice value is approx 2.12 Crore.After completing all the procedures for export ane exportation of goods, I filled RFD-1 to the department claiming refund of ₹ 50 lacs as I paid IGST on inward supply.

Department's view is, because the amount if ITC is not reflecting in ledger they are unable to process the refund, further they also said that the amount of refund claim is higher than the the invoice value of exported goods.

Please guide what we have to do further and what are the procedures for filing a refund in case of zero rated supply.

[Shilpi Jain]

The ₹ 50L paid should be taken as credit in your returns to be able to get refund.

However, there is no requirement that the refund can be claimed only to the extent of the goods manufactured and sold. No such correlation is required in the law. The formula in rule 89 does not require this.

[Ganeshan Kalyani]

The invoices must be reflecting in GSTR 2A report. Ask your supplier to upload the tax invoice details in their GSTR 1.

[Rajagopalan Ranganathan]

Sir,

According to you, the value of export goods is 2.12 crores. The refund claimed by you is 50 lakhs. Then how the department can say that the refund claimed is higher than the invoice value of exported goods. Please clarify.

[KASTURI SETHI]

Yes, the query needs clarification as pointed out by Sh.Ranganathan, Sir.

Further, verbal view has no value. Get in writing from the Department.

AI Summary

Zero-rated supply refund: ensure IGST credit is reflected in returns and supplier GSTR uploads before claiming. IGST paid on inputs for export must be taken as input tax credit in the taxpayer's returns to enable refund processing; lack of ledger/return reflection will block the refund. The law does not require refund claims to be matched to exported goods' invoice values. Ensure supplier invoices are uploaded in GSTR-1 so entries appear in GSTR-2A and reconcile records. If the department raises objections verbally about non-reflection or alleged excess claims, obtain written clarification and rectify filings or supplier uploads before re-filing the refund.