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

IGST refund on exports: exporters may pay IGST and claim refund despite export duty, subject to notified restrictions.
The proviso to the CGST refund provision prevents refund of unutilised input tax credit for exports of goods subject to export duty, but that does not per se bar exporters from paying IGST on such exports and claiming refund of the IGST under the IGST Act and refund rules. Views differ on whether goods subject to export duty qualify as zero-rated supplies; recent legislative amendments and notifications have imposed notification-based restrictions narrowing the IGST-payment refund route for specified goods, making the availability of the refund route dependent on current notifications and GST Council recommendations.