Refund - Credit note for export of services issued with IGST

[Bishan Shah]

Dear Experts,

We are providing recruitment outsourcing services to our clients located outside India and its fulfilling otherwise all the criteria of export of services as envisaged under 2(6) of IGST Act, 2017. For one transaction we have issued Commercial invoice to the client located in USA and based on tax invoice in INR currency paid IGST. At the time of Filing GSTR-1 the same has been reported as Export of services with payment of IGST and in 3B also the same is reported as zero rated supply.

Later, Credit note for the said commercial invoice has been issued to the Client and accordingly credit note in INR with IGST also issued.

Now, we have paid IGST at the time of issuance of tax invoice however refund is not claimed as amount is not received and now credit note has been issued.

So, the question is whether refund can be claimed of IGST paid at the time of export invoice ? If yes, under which category?

AI Summary

Company Can't Claim IGST Refund After Issuing Credit Note Under Section 34, Must Adjust Against Future Liabilities. A company providing recruitment outsourcing services to clients outside India issued a commercial invoice with IGST for a client in the USA, reporting it as an export of services. After issuing a credit note for the entire transaction, they inquired whether a refund of the IGST paid could be claimed. Experts advised that since the credit note was issued under Section 34, using IGST for other liabilities, claiming a refund would result in a double benefit, which is not permitted. Instead, the IGST should be adjusted against future liabilities, and any refund would fall under 'excess tax paid' if no liabilities exist.