Refund of Input Tax Credit denied where IGST refund claimed, affecting zero rated supplies' refund entitlement.
The statutory proviso denying refund of input tax credit when refund of IGST is claimed conflicts with the rules' pooled, proportionate allocation method. The refund rules treat the credit ledger as a pool and apportion refundable ITC by a turnover ratio, producing a maximum refundable amount that may be reduced by ledger availability. Applying the proviso to reduce the formulaic maximum would require tracing credits and create complexity; a clarification or amendment is needed to reconcile the denial clause with the proportionate refund mechanism and to preserve the zero rating principle. (AI Summary)