Export sales return and re -export

[Sooraj B]

An exporter exported goods on payment of IGST and received refund of the IGST paid. However, subsequent to the export, the goods were returned back to India by the customer due to quality issues. The exporter cleared the goods without payment of import duty under the re-export option by furnishing a bond and then re-exported the goods under LUT. In the meanwhile, the exporter paid back through DRC-03, the IGST refund received, as he thought that since the goods were sent back, he had to pay back the IGST refund received. Was the exporter right in paying back the IGST refund received ? Can the exporter now apply for refund of the IGST paid through DRC-03? Kindly share your views .

[KASTURI SETHI]

Ultimately the goods were exported without payment of duty under LUT. Undisputed fact.

The exporter was right in paying back the refund of IGST.

Not entitled to refund of IGST paid back through DRC-03.

Eligible to claim refund of unutilized ITC under Section 54 (3) (i) of CGST Act read with Section 16 of IGST Act.

[Ganeshan Kalyani]

I agree with the view of Sri Kasturi Sir.

[Sooraj B]

Thank you Sirs for sharing your views .

[Raam Srinivasan Swaminathan Kalpathi]

To further add, the amount of IGST refund received which was paid back through DRC-03 must also carry interest u/s.50.  

Also, the exporter can always adjust the ITC on the inputs exported under LUT and use it for future export with payment or domestic supplies.  Thanks

AI Summary

Refund of IGST: repayment of refunded IGST on returned exports bars further refund but allows refund of unutilised ITC.
Repayment of the IGST refund was appropriate where returned goods were cleared for re export under bond and re exported under LUT; no refund of the IGST repaid through DRC 03 is available. The exporter may claim refund of unutilised input tax credit under the statutory refund provisions, must pay interest on the IGST amount repaid under the provisions governing interest on tax/erroneous refunds, and may adjust or utilise ITC attributable to the exported inputs for future exports with payment or domestic supplies.