TaxTMI 
TaxTMI 
2023 (6) TMI 744
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....n reference to both CGST Act and TGST Act. 3. It is observed that the queries raised by the applicant fall within the ambit of Section 97 of the GST ACT. The Applicant enclosed copies of challans as proof of payment of Rs. 5,000/- under SGST and Rs. 5,000/- under CGST towards the fee for Advance Ruling. The Applicant has declared that the questions raised in the application have neither been decided nor are pending before any authority under any provisions of the CGST/TGST Act' 2017. The application is therefore, admitted. 4. Brief facts of the case and averments of the applicant: 4.1 M/s. Kaveri Exports deals in the export of cotton lint - fully pressed cotton bales. They have submitted that they are in receipt of duty credit e-scrips under the scheme for remission of duties and taxes on exported products (RoDTEP) from the Department of Foreign Trade. They further submitted that these e-scrips are used for clearing imports and are also freely transferrable if the exporter does not have any corresponding imports. The applicant further argued that these e-scrips are exempted from tax vide Notification No. 02/2017 dt: 28.06.2017. The applicant is of the opinion that as the e-scri....
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....are exempt from tax vide this notification. The duty credit scrips being exempted attracted the provisions of Section 17(2) and Rule 42 of the CGST Act i.e., reversal of all common inputs used for supply of exempt goods/services in the proportion value of supply of such exempt goods and services to the total value of supplies. However vide notification no. 14/2022 dt: 05.07.2022 a new clause (d) was inserted in the Explanation-1 to Rule 43 wherein the scope of the said explanation was expanded to exclude the value of duty credit scrips from the aggregate value of exempt supplies for the purpose of the Rule 42 as follows: "(d) the value of supply of Duty Credit Scrips specified in the notification of the Government of India, Ministry of Finance, Department of Revenue No. 35/2017-Central Tax (Rate), dated the 13th October, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number GSR 1284(E), dated the 13th October, 2017." After the insertion of this Rule, the value of duty credit scrips will not form part of value of exempt supplies for the purpose of computation of reversal of input tax credit under Rule 42 of the CGST Rules. 8. ....
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..... The Duty Credit Scrips and goods imported / domestically procured against them shall be freely transferable. The Duty Credit Scrips can be used for : (i) Payment of Basic Customs Duty and Additional Customs Duty specified under sections 3 (1), 3 (3) and 3 (5) of the Customs Tariff Act, 1975 for import of inputs or goods, including capital goods, as per DoR Notification, except items listed in Appendix 3A. (ii) Payment of Central excise duties on domestic procurement of inputs or goods, (iii) Deleted (iv) Payment of Basic Customs Duty and Additional Customs Duty specified under Sections 3 (1), 3 (3) and 3 (5) of the Customs Tariff Act, 1975 and fee as per paragraph 3.18 of this Policy Transfer of these 'Duty Credit Scrips', for a consideration, becomes a supply under the provisions of CGST/TGST Act' 2017. (v) The Notification no. 02/2017- Central Tax (Rate) dated 28.06.2017 which provided list of goods which were exempted from payment of GST was amended vide Notification No. 35/2017- Central Tax (Rate) dated 13.10.2017 to include a new entry of 'Duty Credit Scrips' under the HSN '4907' at Serial No. 122A. Thus the 'Duty credit scrips', which are classified under the cate....
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....of India, Ministry of Finance, Department of Revenue No. 35/2017-Central Tax (Rate), dated the 13th October, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number GSR 1284(E), dated the 13thOctober, 2017." Explanation 1 of Rule 43 of CGST Rules' 2017: - "For the purposes of rule 42 and this rule, it is hereby clarified that the aggregate value of exempt supplies shall exclude: - (a) [the value of supply of services specified in the notification of the Government of India in the Ministry of Finance, Department of Revenue No. 42/2017-Integrated Tax (Rate), dated the 27th October, 2017 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number GSR 1338(E) dated the 27th October, 2017;] This is omitted vide Notf no. 03/2019-CT dt. 29.01.2019 wef 01.02.2019 (b) the value of services by way of accepting deposits, extending loans or advances in so far as the consideration is represented by way of interest or discount, except in case of a banking company or a financial institution including a non-banking financial company, engaged in supplying services by way of accepting deposits, extending....
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....he relevant period.']185 (F) "Relevant period" means the period for which the claim has been filed [(4A) In the case of supplies received on which the supplier has availed the benefit of the Government of India, Ministry of Finance, notification No. 48/2017-Central Tax dated the 18th October, 2017 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R 1305 (E) dated the 18th October, 2017, refund of input tax credit, availed in respect of other inputs or input services used in making zero-rated supply of goods or services or both, shall be granted. [(4B) Where the person claiming refund of unutilised input tax credit on account of zero rated supplies without payment of tax has - (a) received supplies on which the supplier has availed the benefit of the Government of India, Ministry of Finance, notification No. 40/2017-Central Tax (Rate), dated the 23rd October, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R 1320 (E), dated the 23rd October, 2017 or notification No. 41/2017- Integrated Tax (Rate), dated the 23rd October, 2017, published in the Gazette of India, E....
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....it scrips' should be reduced from the total turnover in the state as defined under clause (112) of section 2 for computation of the 'Adjusted Total Turnover' as per Rule 89(4) of CGST Rules' 2017. (xi) As per Rule 89(4B) of the CGST Rules' 2017 Where the person claiming refund of unutilised input tax credit on account of zero rated supplies without payment of tax has received supplies on which he has availed the benefit of the notification No. 40/2017-Central Tax (Rate) dated 23rd October, 2017 or notification No. 41/2017- Integrated Tax (Rate) dated 23rd October, 2017 or availed the benefit of notification No. 78/2017-Customs, dated 13th October, 2017 the refund of input tax credit, availed in respect of inputs received under the said notifications for export of goods and the input tax credit availed in respect of other inputs or input services to the extent used in making such export of goods, shall be granted. This mandates to compute the amount of refund of input tax credit pertaining to only those inputs received under the said notifications and other inputs or input services, only, to the extent used in making such export of goods. Therefore the relevancy of the turnover pe....