Refund of IGST paid on imports

[Kapil Gupta]

Dear Experts,

I want to know whether I am eligible for refund of IGST paid on imports of goods under any circumstances.

I have a restaurant in Maharashtra and i import goods related to same from outside India to my factory in madhya pradesh where I process the imported goods and send to my restaurant for serve to customers. My question is i am paying 18-28% IGST on import and transferring all the goods from MP to Maharashtra @ 5%. Can I eligible to take the refund of accumulated ITC in this case?

Your valuable suggestions in this regard will be highly appreciable.

Thankx in advance.

[Shilpi Jain]

What is the reason that the goods are transferred at 5%? Is it as per the rate notification?

If that's in line with law you can claim refund of accumulated ITC at the processing unit.

[Kapil Gupta]

Not as per 5% but most of the goods transferred at 5% only.

[Ganeshan Kalyani]

If you are transferring all your imported material as such then the rate of tax paid on import will apply on transfer. Each material is subject to GST as per tariff. There is no flat single rate.

AI Summary

Refund of accumulated input tax credit may be available where GST rates on inter-state transfers align with law. Eligibility for refund of accumulated input tax credit on IGST-paid imports turns on whether the GST rate applied to the inter-state transfer is consistent with law; if the lower transfer rate is backed by applicable rate notifications and correct tariff classification, the processing unit may claim the refund, but each material must be taxed according to its statutory tariff rather than a single flat rate.