Refund under rule 89(4B)

[KARAN VERMA]

Sir

I m importing goods duty free and then export after manufacturing the same without payment of tax.

Now, my question is under which refund option i claim refund of GST paid on other inputs and input services used in exporting such goods.

[Shilpi Jain]

You have both the options presently, that is export without payment of tax and go for refund of the input tax credit. Though if there are capital goods related credit this would not be advisable.

Alternatively you could also export with payment of tax in go for refund.

You could also look at other schemes under FTP which will allow you to import duty free.

[AK ASSOCIATES]

Dear Karnan Verma,

I slightly differ from Madam's view. As you have mentioned that you had imported goods without payment of IGST, then it must be either EOU unit or Advance Authorization Holder. As you had availed the benefit of Notification No. 78/2017 or 79/2017-Customs, Refund of IGST paid on export of goods can not be claimed under rule 96(10) of CGST Rules,2017.

So, I am of the view that you are eligible to claim refund either under rule 89(4) of GST Rules or rule 89(4B) of GST Rules. Some people are of the opinion that in such cases, refund shall be claimed under rule 89(4B) only. I differ from this. Rule 89(4B) is an additional option. In other words, rule 89(4) does not restricts refund claims by AA or EOU units

[Shilpi Jain]

Seems like I have missed the phrase 'duty-free' in the question

[Shilpi Jain]

Under section 96(10) there is an option available whereby, when you are importing you can opt to pay the IGST only and take exemption of BCD. In such case you would still have the option of exporting with payment of tax.

so the option to choose I.e. with payment of tax or without payment of tax export, would depend on the facts of a particular case.

AI Summary

Refund under rule 89(4B): exporters using duty free imports can claim input tax credit refund or opt for rule 89(4).
Exporters who import duty free and export without payment of tax can claim refund of input tax credit on inputs and input services used in the exported goods by claiming refund under rule 89(4) or, alternatively, under rule 89(4B); rule 89(4B) is an additional option and does not preclude claims under rule 89(4). If IGST was not paid at import due to duty free schemes, the refund route tied to paying IGST at import is generally unavailable, though an importer may elect to pay IGST at import and export with payment to use the refund mechanism applicable to export with payment, depending on case facts.