Export Refund

[Kaustubh Karandikar]

XYZ is having two types of supplies

1) Exporting manufactured goods or goods received from a supplier who is charging full GST which in turn is exported by XYZ.

2) XYZ is acting as a merchant exporter where the supplier of goods is charging 0.1% GST which in turn is exported by XYZ under LUT. Can XYZ pay IGST on exports under first situation and claim refund of the same and also act as a merchant exporter for the second situation or he is not allowed to do the same since prohibited by Rule 96(10) of CGST Rules?

AI Summary

Export refund eligibility may be barred where exporter receives concessional supplies, risking mixed IGST refund and LUT export routes.
Rule 96(10) has been interpreted to bar an entire GST registration from claiming refund of IGST paid exports if the unit receives any goods under the concessional merchant export rate, preventing mixed use of IGST payment/refund and LUT routes; Circulars suggest concessional rate supplies must be exported under LUT and that the concessional option is optional, but their differing issuance basis and wording leave the tension with the rule unresolved and expose taxpayers to departmental challenge, prompting recommendations to notify authorities and proceed cautiously.