Query on Export of Services & ITC Refund - Guidance Required

[Tushar Malik]

Our client is a Delhi-based subsidiary of a foreign company. The Indian subsidiary provides IT and support services to its parent company located outside India.

For the last 3 years, the services were treated as taxable domestic supplies, and GST was paid after availing ITC.

From FY 2025-26, the company intends to treat these as Export of Services, since all conditions under Section 2(6) of the IGST Act are fulfilled, and plans to claim refund of unutilized ITC under Section 54(3) read with Rule 89(4).

Queries:

1. Whether the unutilized accumulated ITC of the previous financial year can be claimed as refund now?

2. Whether ITC paid under RCM on services imported from the same foreign parent can also be included in the refund claim?

3. What is the time limit and frequency (monthly/quarterly) for filing refund claims in case of export of services under LUT?

Any practical guidance or case references from senior professionals will be appreciated.

AI Summary

Reclassifying IT services as exports under Section 2(6) IGST to claim ITC refunds under Section 54(3) and Rule 89(4) A Delhi-based subsidiary of a foreign company provides IT and support services to its foreign parent. For three years, these were treated as taxable domestic supplies with GST paid using input tax credit (ITC). From FY 2025-26, it plans to reclassify them as export of services under Section 2(6) of the IGST Act and seek refund of unutilized ITC under Section 54(3) and Rule 89(4). The queries concern: entitlement to refund of accumulated ITC of earlier years, inclusion of ITC paid under reverse charge on services imported from the parent in the refund base, and the applicable time limit and periodicity (monthly or quarterly) for filing LUT-based export refund claims.