Sir,
A RMG manufacturer claiming IGST on every export shipment (@ 5%), his raw material attracts GST @ 12%. however the unit claiming IGST on export from 4 years. due to higher rate of GST on inputs, they are unable to set off all ITC on account of IGST on export, as the output rate of GST is lower (5%).
Resulting they having much ITC available in their ECL.
Please suggest how it can be refunded.
Garment manufacturer struggles with unutilized ITC due to GST rate mismatch; refund blocked under CGST Act, 2017. A ready-made garment manufacturer faces an issue with accumulated input tax credit (ITC) due to a higher GST rate on raw materials (12%) compared to the output GST rate on exports (5%). Despite exporting goods with IGST payment for four years, they cannot claim a refund on unutilized ITC. Experts in the forum agree that a refund is not possible due to specific restrictions under the CGST Act, 2017, particularly when goods are exported with IGST payment. They suggest ensuring future exports are done without IGST payment to prevent further accumulation of ITC. (AI Summary)
TaxTMI 
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TaxTMI 
