GST refunds with payment of tax and IDS for fabrics under same taxperiod

[Prabhakar Jebakumar]

Dear all, A manufacturer of fabrics is engaged in both domestic sales and exports with payment of tax. During a particular month, Export sales with payment of tax say IGST Rs. 250000/- was made and tax paid by adjusting ITC as per GSTR3B. The IGSt refunds was automatically credited by Customs dept based on Shipping Bills. The total ITC for the said period (claimed in GSTR3B) excluding services and capital goods is nearly 60,00,000/- . Now Need to obtain refunds under IDS for domestic goods. 

For that please clarify, whether IDS refund for the same period is available or not. If it is available, what would be the net ITC . It is Rs.60,00,000/- or Rs. 35,00,000(60lakh - 35lakh).I believe it is Rs.35 lakh as ITC of Rs.25lakh is encashed under automatic route. Kindly clarify. Thank you all in advance

AI Summary

IGST encashed for exports reduces IDS refund: only unutilised ITC after export encashment counts; net example Rs.35,00,000 If IGST on exports was refunded/encashed by Customs for the same tax period and the corresponding ITC was used/adjusted for that export, the claimant cannot count that portion again for an inverted-duty refund (IDS). The IDS refund is available only on the residual unutilised ITC attributable to domestic supplies in that period after accounting for ITC used/encashed for exports. Accordingly, assuming Rs.25,00,000 of ITC was effectively encashed for exports, the net ITC available for IDS would be Rs.35,00,000 (Rs.60,00,000 - Rs.25,00,000). Exact entitlement should be verified against GSTR-3B, shipping bills and refund credits.