Different rates of goods for export and domestic sales

[Rajesh Kumar]

Dear Experts,

A manufacturer sales his goods in the domestic market as well as export the same. Let’s the sale value of any item is Rs. 100/- then same item being exported @ Rs. 200/-.
Now Department took the matter and being forwarded to Customs for overvaluation of goods to taking more export incentives including IGST refund.

Please guide:

1. Is there really an issue in the above said valuations?

2. Can department forward the matter to customs ?

3. Can they insist the domestic sale as undervalued and demand duty according to the rate of export?

AI Summary

Valuation of exports: transaction value governs export pricing and may limit refund claims for over-declared exports.
Difference between domestic and export prices can trigger scrutiny of export valuation and refund claims under GST. Rule 89(4)(c) sought to cap zero-rated turnover by reference to domestic value, but a High Court quashed that provision as ultra vires. Transaction value (invoice supported by contracts and export documentation) remains the primary basis for valuation and refund entitlement, contingent on realisation evidenced by BRCs; unsupported higher export declarations can lead to recovery of excess refunds, interest and penalties and may prompt customs verification.