Refund of IGST paid on goods exported where goods are subject to Export Duty

[Sandeep Mukherjee]

As per the second proviso to Section 54(3) of the CGST Act, 2017, no refund of unutilised input tax credit shall be allowed in cases where the goods exported out of India are subjected to export duty. However, I have not come across any such restriction in refund of IGST paid on the export of the said goods.

Does this mean that in case of goods subjected to export duty, instead of claiming refund of unutilized ITC, one should export by paying IGST and claim refund of such IGST paid?

AI Summary

Debate on IGST Refunds for Export Duty Goods: Current Law Permits Claims, Changes Expected by October 1, 2023 A discussion on the refund of Integrated Goods and Services Tax (IGST) for goods exported under export duty reveals differing opinions. One participant argues that goods subject to export duty cannot be classified as 'zero-rated supply,' thus disqualifying them from IGST refunds. Another participant contends that, under current GST law, exporting such goods with IGST payment and claiming a refund is permissible, though this may change with upcoming amendments. The discussion highlights the urgency for exporters to utilize the current refund facility before potential changes take effect on October 1, 2023, which may restrict this option for certain goods.