TaxTMI 
TaxTMI 
TaxTMI 
2025 (9) TMI 918
X X X X Extracts X X X X
X X X X Extracts X X X X
..../labelled, according to the specification provided by the foreign buyer; the applicant then packs the rice in their factory in these bags and exports it to the foreign buyer; • Supply of rice to customers located in India [bill to ship to basis]. Empty printed/labelled bags, having capacity of upto 25 kgs are supplied by the exporter to the applicant, who then packs the rice in these bags & dispatches it to the Customs port as per the instructions of the Exporter, who ultimately exports the rice to a foreign buyer; • Supply of rice to customer located in India who purchases the rice from the applicant for exports. Empty printed/labelled bags, having capacity of upto 25 kgs are supplied by the exporter to the applicant, who packs the rice in these bags & dispatches it to the factory of the exporter, who ultimately exports the pre packaged rice to a foreign buyer. • that the purchase of rice upto 25 kg at concessional rate for exports is in terms of notification No. 41/2017-IGST(R); • that in terms of entry no. 51 of Schedule I of notification No. 1/2017-CT (R), dated 28.6.2017, as amended, wef 18.7.2022, export of pre-packaged and ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed on behalf of the applicant and reiterated the facts & grounds as stated in the application. 5.1 In pursuance to the transfer of Member (Centre), fresh personal hearing was held on 29.7.2025, wherein Shri Suketu C. Shah, CA, appeared on behalf of the applicant and reiterated their submission. To a specific query as to why they intended to pay IGST @ 5% on export of goods, when they are eligible to receive supplies @ 0.1 % GST for goods which are ultimately exported, the applicant vide letter dtd. 07.08.2025, has informed that though the rice is procured at concessional rate of 0.1%, they also utilise other services like transportation of goods, CHA services, shipping services etc., which are charged at either 12% or 18%. Thus, the input tax is not only limited to 0.1% GST but there are other Input tax Credits available, which are charged at higher rates. Discussion and findings 6. At the outset, we would like to state that the provisions of both the CGST Act and the GGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provisi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....aid in accordance with the provisions of section 54 of the Central Goods and Services Tax Act or the rules made thereunder; (ii) a class of goods or services or both, on zero rated supply of which, the supplier may pay integrated tax and claim the refund of tax so paid, in accordance with the provisions of section 54 of the Central Goods and Services Tax Act or the rules made thereunder. (5) Notwithstanding anything contained in sub-sections (3) and (4), no refund of unutilised input tax credit on account of zero rated supply of goods or of integrated tax paid on account of zero rated supply of goods shall be allowed where such zero rated supply of goods are subjected to export duty. • Notification No. 1/2017-IT (Rate) dated 28.6.2017/ Notification No. 1/2017-CT (Rate) dated 28.6.2017, as amended vide notification No. 6/2022-IT (R) dtd 13.7.2022/6/2022-CT (R) dtd 13.7.2022 and Notification No. 1/2025-CT(R) dtd. 16.01.2025 Schedule I-5% S. No. Chapter/Heading /Sub-Heading/Tariff Item Description of goods (1) (2) (3) 51 1006 Rice [pre-packaged and labelled] Explanation.-For the purposes of this notification,- ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... or Land Customs Station from where the said goods are to be exported; or (b) directly to a registered warehouse from where the said goods shall be move to the Port, Inland Container Deport, Airport or Land Customs Station from where the said goods are to be exported; (vii) if the registered recipient intends to aggregate supplies from multiple registered suppliers and then export, the goods from each registered supplier shall move to a registered warehouse and after aggregation, the registered recipient shall move goods to the Port, Inland Container Deport, Airport or Land Customs Station from where they shall be exported; (viii) in case of situation referred to in condition (vii), the registered recipient shall endorse receipt of goods on the tax invoice and also obtain acknowledgement of receipt of goods in the registered warehouse from the warehouse operator and the endorsed tax invoice and the acknowledgment of the warehouse operator shall be provided to the registered supplier as well as to the jurisdictional tax officer of such supplier; and (ix) when goods have been exported, the registered recipient shall provide copy of shipping bill or....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nt of IGST and claiming refund of IGST. These are subject to such conditions, safeguards and procedures. Vide notification No. 1/2023-IT dated 31.7.2023, as amended vide notification No. 5/2023-IT dated 26.10.2023, the Central Government has specified the class of persons as well as the class of goods or services or both, who are entitled to make zero rated supply on payment of integrated tax and claim refund of the tax so paid in accordance with the provisions of section 54 of the CGST Act or the rules made thereunder. As the applicant has on record said that they are engaged in supplying rice in pre-packaged & labelled packages having quantity of upto 25 kgs, in terms of section 5 of the IGST Act, 2017, if the applicant opts for [b] supra, he is liable to pay IGST @ 5% in terms of notification No. 1/2017-IT (R) dtd. 28.06.2017, as amended. It may be noted that this is subject to the condition that the pre-packaged & labelled packages of rice exported by the applicant, fall within the expression 'pre-packaged & labelled' defined under the explanation to the notification. 10. The second question posed is whether GST would be applicable on supply of pre-packaged and labelled r....
X X X X Extracts X X X X
X X X X Extracts X X X X
....as procured at a concessional rate of GST of 0.1%, the applicant in their submissions dtd. 07.08.2025 have informed that during the course of exports they were utilising various services such as transportation of goods, CHA services, shipping services etc. which are charged at 12% to 18% GST. Though refund of ITC is available when the export is made either under LUT or on payment of tax, the refund in case of later is automatic and quick. Whereas, when the export is made under LUT, the applicant needs to separately apply for refund which approximately takes2 months and leads to blockage of funds. It is also the applicant's contention that post amendment of Rule 89 vide notification No. 20/2024-CT dated 8.10.2024, wherein sub-rule 4A and 4B, were ommitted, there is no bar, if the applicant acts as a merchant exporter by purchasing pre-packaged labelled rice upto 25 Kgs for export of goods on payment of tax @ 5%. We find that there was a restriction in claiming refund of IGST paid on goods exported under the erstwhile Rule 96(10) ibid, if the benefit of Nos. 48/2017-CT dated the 18.10.2017, 40/2017-CT (R) dated 23.10.2017, 41/2017-IT(R) dated 23.10.2017, 78/2017-Customs dated 13.10.2....