Regarding Input tax credit availed on bank charges and claiming refund of the same on Export of goods without payment of GST.

[sathish k]

Generally while having Cash credit or overdraft account, Bank collects some charges for the transactions made through such account (like IMPS, Neft and Cheque / ledger folio charges). While receiving export payments and duty drawbacks also bank collects some additional charges for processing the same and crediting to our account. The above charges and fees are inclusive of GST. The bank instead of issuing filing individual transaction charges while filing their GST returns, it aggregates all the charges on monthly basis and file the total tax amount of charges and corresponding tax amount and the same is made available to taxpayer in GSTR - 2B and GSTR-2A respective periods.

The main issue : Incase of export, while claiming the refund of ITC on export without payment of GST, I had included those bank charges on the ITC available to be claimed and submitted RFD-01. But the claim of ITC with respect to tax on bank charges has been rejected by proper officer couple of times stating that it is ineligible without providing any clarification or base justification for it. 

Query : whether the GST paid on bank charges is eligible or ineligible to be claimed while claiming a refund on the export of goods without payment of GST?

Kindly help me to understand by supporting provisions/justifications from the Act / Rules so that I would convey that to the proper officer while processing for submission of refund application

AI Summary

Eligibility of Input Tax Credit on Bank Charges for Exporters: Section 16 of CGST Act 2017 Clarified A user inquired about the eligibility of claiming input tax credit (ITC) on bank charges when exporting goods without paying GST. The bank charges, which include GST, are aggregated monthly and reflected in GSTR-2B and GSTR-2A. The user's ITC claims for these charges were rejected by the tax officer without explanation. A respondent cited Section 16 of the CGST Act, 2017, affirming the eligibility of such claims, and advised discussing with the officer or requesting a show cause notice if the rejection persists. Another respondent agreed, noting that bank documents serve as invoices, and no direct correlation between input and output is required for refund claims.