Valuation of zero-rated supplies limits ITC refunds by capping export turnover to domestic comparable value, affecting LUT exporters.
The amendment redefines valuation for zero-rated supplies by making the turnover for refund purposes the lesser of export invoice value or 1.5 times the value of like goods domestically supplied by the same or a similarly placed supplier, altering the numerator for proportionate ITC refund calculations while total invoice sales remain the denominator. The change affects exporters using a Letter of Undertaking, creates evidentiary and comparability issues for pure exporters, and does not impact exporters who pay tax and claim refund of tax paid. (AI Summary)

Input tax credit reversal for unpaid supplier invoices triggers proportionate reversal and interest until payment discharges the liability.
ITC must be reversed proportionately where payment to the supplier for a taxable invoice remains unpaid beyond the prescribed period, with interest payable from the invoice date until reversal; discounts reduce taxable value and ITC only if documented as required, otherwise the recipient remains liable for reversal, and reclaimed credit on later payment may be constrained by return-reconciliation and supplier-upload limits. (AI Summary)