Re - Export of Rejected goods

[Kaustubh Karandikar]

XYZ imported goods and claimed ITC of the IGST element. Part quantity of the said goods were rejected and re – exported because of quality issue. Can XYZ re – export the same without payment of GST under LUT? In my view yes since there is no on to one corelation and GST provisions allows export without payment of GST. Views of the experts please.

[Ganeshan Kalyani]

Sir, I agree with your view.

[Shilpi Jain]

Also u can claim drawback of the BCD paid?

[Kaustubh Karandikar]

yes shilpi ji, in my view drawback can be claimed against exports based on all industry rates

[Raghunandhaanan rvi]

Sir

This is the re-export of partial goods imported into India. Thus Section 74 of the Customs Act applies. Under Section 74 of CA 1962, 98% 0f the customs duty paid on importation will be refunded as duty drawback. However, if you availed of ITC, needs to be reversed proportionately. In this case, All industry rates are not applicable since 'AI' is available for the export of goods manufactured in India only. This is my view

AI Summary

Re-export of rejected imports: re-export under LUT may avoid GST, but IGST credit must be proportionately reversed and drawback rules apply. Whether imported goods on which Input Tax Credit of the IGST was claimed may be re-exported without payment of GST under a Letter of Undertaking, with contributors agreeing re-export under LUT is permissible but requiring proportional reversal of availed ITC; duty drawback of basic customs duty may be claimed, though all industry rates typically apply only to goods manufactured in India and customs refund procedures govern entitlement.