Rule 96(10) of CGST Rules

[Kaustubh Karandikar]

XYZ imported goods against advance authorization without payment of import duty and IGST. Part of these goods sold by XYZ to PQR under a Tax Invoice by charging GST. PQR claimed ITC of the GST charged by XYZ. PQR exported these goods on payment of IGST under claim for refund. Is it allowed as per Rule 96(10) of CGST Rules, 2017?

[Shilpi Jain]

PQR has not claimed any duty benefit. Hence, restriction of R 96(10) not applicable.

However, here XYZ will have to pay the duty benefit claimed on import as the goods are cleared in DTA.

[Kaustubh Karandikar]

Thanks shilpi ji for your kind advice.

AI Summary

Input tax credit restriction waived where purchaser did not claim import duty benefit; importer must repay duty benefit.
Rule 96(10) does not bar a purchaser from claiming input tax credit and export refund where the purchaser did not claim any import duty benefit; the importer who availed duty exemption but cleared the goods into the domestic tariff area must repay or discharge the duty benefit obtained on import.