Refund Application of Accumulated ITC on Account of Sales Made to Exporter@ 0.10%

[NILESH PITALE]

Dear Expert

We are in Dealing of Goods Having GST Rate @18% and The same Goods we are selling to the Exporter @ 0.10% , Therefore There is Huge ITC Accumulated in our credit ledger,

Our Question : Can we apply for refund as per circular No Circular No. 125/44/2019 - GST dated 18.11.2019, Please Guide

[Sadanand Bulbule]

In terms of following Para No.59 of the CBIC Circular No.125/44/2019, you are entitled for refund of accumulated ITC:

Clarifications on other issues

59. Notification No. 40/2017 - Central Tax (Rate) and notification No. 41/2017 - Integrated Tax (Rate) both dated 23.10.2017 provide for supplies for exports at a concessional rate of 0.05% and 0.1% respectively, subject to certain conditions specified in the said notifications. It is clarified that the benefit of supplies at concessional rate is subject to certain conditions and the said benefit is optional. The option may or may not be availed by the supplier and / or the recipient and the goods may be procured at the normal applicable tax rate. It is also clarified that the exporter will be eligible to take credit of the tax @ 0.05% / 0.1% paid by him. The supplier who supplies goods at the concessional rate is also eligible for refund on account of inverted tax structure as per the provisions of clause (ii) of the first proviso to sub-section (3) of section 54 of the CGST Act. It may also be noted that the exporter of such goods can export the goods only under LUT / bond and cannot export on payment of Integrated tax.

Reply

AI Summary

Accumulated input tax credit refund on low-rate supplies to exporters under GST refund and circular-based eligibility framework Refund of accumulated input tax credit is sought where goods taxable at 18% are supplied to an exporter at 0.10%, resulting in a large credit balance in the electronic credit ledger. The issue raised is whether such accumulated ITC can be claimed as refund under the GST refund framework and the relevant circular dealing with refund procedures.