TaxTMI 
TaxTMI 
Export of goods on payment of IGST | Goods Return
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....xport of goods on payment of IGST | Goods Return <br> Query (Issue) Started By: - Nikunj Kishorbhai Tosar Dated:- 9-7-2025 Goods and Services Tax - GST <br> Got 3 Replies <br> GST<br> <br> Fact of the case: Export of goods made with payment of IGST, and refund received of it against the unutilized ITC. Subsequently the customer returned the partial goods due to quality issues. the rejected goods w....
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....ere imported and IGST paid on filing the Bill of Entry. Question 1: whether the refund received is required to be paid back with interest considering the Rule 96B - "Recovery of refund of unutilised input tax credit or integrated tax paid on export of goods where export proceeds not realised". Question 2: to record the rejected goods imported - a credit note (export with payment of tax) can be gen....
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....erated, and liability can be reduced in GSTR-1 Export of Goods Amount Export Invoice With payment of tax Liabilty Increased 5,00,000 Impact on ITC ITC Decreased -5,00,000 Refund Received Cash Increased 5,00,000 Total (A) 5,00,000 Goods Retuned Amount Credit note with payment o....
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....f tax Liab Decreased -5,00,000 Impact on ITC ITC Increased 5,00,000 Refund to be paid back Cash Decreased -5,00,000 Total (B) -5,00,000 Net Impact (A) - (B)  ....
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....; - Thanks in Advance. --Reply By: YAGAY andSUN The Reply: Question 1: Applicability of Rule 96B Rule 96B of the CGST Rules applies when export proceeds are not realized within the period allowed under FEMA. However, in your case, the partial goods exported with payment of IGST were returned by the customer due to quality issues and re-imported into India with IGST paid at the time ....
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....of filing the Bill of Entry. This constitutes a commercial return of goods, not a case of non-realization of export proceeds. Therefore, Rule 96B is not attracted, and refund received earlier under export with payment of tax is not required to be repaid with interest merely due to the return of goods, provided the transaction is adequately disclosed and documented. Question 2: Treatment of Returne....
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....d Goods and GST Liability For the returned goods, a credit note can be issued under Section 34 of the CGST Act, even for exports made with payment of tax. This will reduce the outward tax liability in GSTR-1. Since the goods were physically returned and IGST was paid upon re-import, the reversal of liability via credit note is appropriate. The IGST paid on re-import can be claimed as input tax cre....
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....dit under Section 16, subject to eligibility. Your accounting treatment—reducing outward liability and restoring ITC aintains neutrality. However, if the refund was claimed and retained for the full export amount, and part of the goods were returned, then proportionate refund should ideally be adjusted or voluntarily reversed to avoid dual benefit, although not under Rule 96B, but as a general p....
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....rinciple of avoiding unjust enrichment. Conclusion: Refund is not repayable under Rule 96B in case of goods return. Issuance of credit note and ITC on re-import is valid. Ensure proportionate adjustment in refund/ITC to maintain tax neutrality and avoid future disputes. --Reply By: Shilpi Jain The Reply: The said rule talks about non-realisation. Bu the present case of non-payment is due to rej....
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....ection which is ideally a case of reduction in invoice value. Though, if you have sufficient balance in itc ledger you could consdier to take a stand of no interest , coul dbe disputed. --Reply By: Nikunj Kishorbhai Tosar The Reply: Thank you for your valuable reply. As per my view, Refund is not required to be paid back with interest where exported goods return and on re-import of goods IGST....
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.... paid on filing of BOE. <br>***<br> Discussion Forum - Knowledge Sharing....