GST Refund -Zero Rates Supplies

[Shantaram Botre]

We are exporting 100% our Product and we do not have sales in the Indian Market ,We have filed GST refund application but Deputy commissioner has reject the Refund Application on the ground of Domestic Clearance , Comparable Price information is missing.

GST commissioner has taken reference of Notification No.16/2020-Central Tax. Need your valuable suggestion.

Regards

CMA S R Botre

[Rajagopalan Ranganathan]

Sir,

Please clarify whether you have exported the goods without payment of IGST under bond /letter of undertaking or on payment of IGST. What is the nature of refund, that is, refund of IGST paid on exported goods or input tax paid on inputs used in the manufacture of exported goods?

Since you have no domestic supply value of domestic supply is zero and 1.5 times of zero is zero. Therefore no refund is payable to you. This is absurd. Since you have exported the goods under proper invoice the department should have taken the value of export as indicated in the export invoice. You prefer an appeal against the order of rejection of refund to the appellate authority.

[Shantaram Botre]

Dear Sir,

Please find the below points.

I) We have exported the goods without payment of IGST under bond /letter of undertaking.

II) Nature of Refund- Mannual Refund, unutilized electronic credit balance

III) Yes ,input tax paid on inputs used in the manufacture of exported goods.

Warms Regards

[Shilpi Jain]

In the present case there being no domestic supply means there is no value which exists as 1.5 of domestic supply. it cannot be taken as zero for sure. Refund should be eligible...

[KASTURI SETHI]

Prima facie, the refund is admissible but I am of the view that there must be some other grounds for rejection. The querist is requested to peruse the rejection order word for word viz-a-viz Notification No.16/20-CT before filing appeal against the Order-in-Original. The department does not reject refund claim without any basis. Something has been missed by the querist.

[Shilpi Jain]

Agreed on that part with Kasturi sir. However that is an aspect which requires professional help. But primarily facility view is it should be eligible.

[KASTURI SETHI]

Yes. Without professional help relief is not possible. In this forum, the querist gets the right direction.

[Harshit Sanghvi]

Please let me know whether we can make this contention :

as per notification following is stated :

“Turnover of zero-rated supply of goods" means the value of zero-rated supply of goods made during the relevant period without payment of tax under bond or letter of undertaking or the value which is 1.5 times the value of like goods domestically supplied by the same or, similarly placed, supplier, as declared by the supplier, whichever is less, other than the turnover of supplies in respect of which refund is claimed under sub-rules (4A) or (4B) or both

the same or, similarly placed, supplier, According to me, you can take price of same or like goods which your competitors are selling in domestic market . And it is the self declaration which can be substantiated by arranging for purchase orders from competitors.

I have been submitting a comparison chart in with following column headings:

Sl No Commodity HSN Export per unit rate Domestic Per unit rate 1.5 of Domestic rate

AI Summary

Zero-rated supply refund eligibility: exporters may use export invoice or comparable domestic prices to substantiate ITC refund claims.
Refund of unutilized input tax credit for zero-rated supplies under bond or letter of undertaking should not be denied merely because domestic supply is absent; export invoice value may be taken for turnover, and where the notification prescribes a lesser of export value and 1.5 times domestic price, taxpayers can substantiate the domestic comparable price by self-declaration supported by comparison charts, competitor purchase orders and market evidence, with an appeal recommended against rejection and professional assistance for compiling proof.