All Rights Reserved. Gujarat HC directs Revenue to “immediately sanction” IGST refund on export of Rope Making Machine [HSN Code 84794000] i.e. 4.According to the petitioner, they are eligible for the refund of the above mentioned IGST refund paid on export of goods. , I argued before *Madurai Bench of Madras Highcourt *, an issue relating to IGST refund being refused by the department because of claim of Higher duty drawback. As the petitioner claimed, he exported the goods only after paying the tax, but he was not offered the refund of the input tax credit as the Zero-rated supply act Section 16(3) of the IGST Act suggests. As per the GST framework, the GST acts as a consumption based tax and hence, the end customer becomes liable for the payment of Goods and Services Tax. However, the same was not a permitted reason under the GST law to withhold refunds. rates and caps available under columns (4) and (5) of the Schedule of All Industry Rates of Duty Drawback have been continued for a transition period of three months i.e. Question 19: I supply goods to SEZ units and developers. We exported certain goods without GST payment under letter of undertaking. The order to be considered as ‘Rule absolute’ i.e., order to be enforced at once and immediately, without any delay. No double benefit. If exporter has wrongly mentioned A, the GST refund for the month of July-Sept is denied while the exporter has not claimed higher drawback since both rates of drawback are the same. In short, a supplier availing drawback of inly basic customs duty shall be eligible for refund of unutilized ITC. You can also get a drawback on your duty and/or GST in cases where: the item you imported was faulty (you must apply for a drawback within a year of importing the item) The Cabinet Committee on Economic Affairs has given its approval for introducing a new Scheme namely Remission of Duties and Taxes on Exported Products (RoDTEP). In order to submit a comment to this post, please write this code along with your comment: dac2acee488b95396072228aac95a7c1. In the Rule 96 of the CGST Rules, the statements were pretty clear. But initially, he availed higher duty drawbacks wrongly. Refund of ITC shall not be allowed if supplier of goods/services avails of drawback in respect of CGST or claims refund of IGST paid on such supplies. Further, it is pertinent to note that, refund of utilized ITC has to be computed as per the method prescribed under Rules 89(4) of the CGST Rules. Importers registered by the Australian Taxation Office for GST purposes may be entitled to an input tax credit on creditable importations. It’s evident that the taxpayers have to pay the refund of IGST on their goods that they export to Bangladesh regardless of the claiming of duty draw. Duty drawback of GST shall not be availed. It has to be paid back. Rule 96(4) makes it abundantly clear that the claime for refund can be withheld only in two circumstances as provided in sub-clauses (a) and (b) respectively of clause (4) of Rule 96 of the rules, 2017. Refund as per formula envisaged. Several goods exporters across the country could not avail of their ITC refund for a period of July 17 to September 17. Several cases … 29 May 2020 Exporters can claim higher rate of duty drawback (composite AIR) subject to conditions that no input tax credit of CGST/IGST is claimed, no refund of IGST paid on export goods is claimed and no CENVAT credit is carried forward. The rationale for not allowing the refund of IGST for those exporters, who claim higher duty drawback is that the higher duty drawback reflects the elements of Customs, Central Excise and Service Tax taken together and since higher duty drawback is already being availed than granting the IGST refund would amount to double benefit as the Central Excise and Service Tax has been subsumed in the GST. Several goods exporters across the country could not avail of their ITC refund for a period of July 17 to September 17. After realizing the mistake of claiming a higher rate of drawback, the petitioner repaid the amount in full along with interest. Some of these were purchased on payment of excise during pre-GST era and some after July 1, 2017 on payment of GST. The respondents are directed to pay the balance amount i.e.,IGST minus higher rate of duty drawback already availed by the petitioner within the time granted by this Court and avoid the additional burden of interest payment on IGST refund. Consideration of Provision for bad & doubtful debts as operating expenses in computation of PLI, Benefit of Filing Income Tax Return for an individual and HUF, Due Date Compliance Calendar January 2021, Corporate Compliance Calendar for January 2021, Join Online Certification Courses on GST covering recent changes, Applicability of Cash Flow Statement, CARO (2016 & 2020) & Internal Financial Control, Income Tax Calculator for Financial Year 2020-21 for Individuals, ICAI request for further extension of TAR/ITR due dates, CA Association Criticised Action & Policies of FMO after insufficient due date extension, Representation for further extension of CFSS 2020, Request for extension of Company Fresh Start Scheme 2020. Rule 96 is relevant for two purposes. Answer: No. This rate is on higher side and cenvat facility is not available with this rate. As per Section 16(3)(b) read with Section 54 of the IGST Act, the Taxpayer has an option to claim refund on the exported goods to the extent of the IGST paid on the exported goods. Goods exported prior to 21 October 2006 have 12 months to claim. of the IGST refund and higher duty drawback. Judgment 1st Gujarat High Court rules that claim of higher rate of duty drawback is not a valid reason for rejection of IGST refund on exports. We are availing duty drawback in the lower rate (from 1/7/2017 onwards), earlier. Introduction: IGST refund inspite of duty drawback on higher rate. Even then, in respect of one shipping bill, both benefits can be claimed simultaneously after 01.10.2017. The information here will help you to claim a: refund of excise duty you have paid on goods; drawback of excise duty paid on goods that have since been exported. John Varrghese by way of reply submits that the respondents if insist upon refund of higher rate of duty drawback by the petitioner with interest, the respondents are also required to pay interest to petitioner from the date on which the petitioner requested for refund of IGST. According to the petitioner, on enquiry, it was found that IGST refund was pending for the reason that the petitioner has availed drawback at higher side i.e., Composite Rate. Because relevant circulars were not brought to their notice either by their GST advisers … Then further judgement states that if claim of the applicant is to be rejected only on basis of. Where the government contemplates expanding the scope of the restrictions for grant of refund, the same may have to be brought only by way of an amendment to the existing provisions of GST law. The Taxpayer had issued Commercial Invoice(s), Export Invoice(s) and Shipping Bill(s). Excise refund or drawback. ITC and refund allowed. Commercial exporters must claim a minimum of NZ$50 drawback. On export of these goods we have claimed duty drawback at higher composite rates for exports made between July 1, 2017 and September 30, 2017. Moreover, taxpayers who supply goods outside of India are eligible for the ‘Zero Rated Supply.’ They also have the option to claim refunds on their exported goods and services. And they needed to consider the Shipping Bills as an application for the taxpayers’ IGST refund. No exporter would prefer to take benefit of 0.85% Duty Drawback against refund of IGST/ Input GST which was at least 5%. 59/2017 - Cus (NT) dated 29.06.2017,certificate from jurisdictional GST officer was required to claim higher drawback for transition period of 3 Months (i.e upto 30.09.2017) Govt. Some of the common areas where one finds issues leading to either no claim or erroneous claim or tips to enable incentives to be cashed have been examined in this article as under: Duty Drawback & GST Refund are mutually exclusive. We exported certain goods without GST payment under letter of undertaking. Counterparty can send his reply using the same feature. Section 54(3) allows refund of un-utilised Input Tax Credit (ITC) under two circumstances i.e. Sir, As per proviso 3 of Section 54 (3) of CGST Act, 2017 "no refund of input tax credit shall be allowed, if the supplier of goods or services or both avails of drawback in respect of central tax or claims refund of the integrated tax paid on such supplies.". Relief for exporters: Higher duty drawback rates to offset taxes 0 December 7, 2017 11:10 am NEW DELHI: Exporters hit by the sharp decrease in duty drawback rates on various items following implementation of the Goods and Services Tax (GST) regime would soon get some relief as the government is finalising higher rates to compensate for embedded taxes. Amit Cotton Industries [R/ Special Civil Application No. Neither the author nor firm and its affiliates accepts any liabilities for any loss or damage of any kind arising out of any information in this article nor for any actions taken in reliance thereon. only be withheld under permitted law, and they could not withhold the decision duty drawback at general rate or he may opt to claim duty drawback at a higher rate (composite rate) without availing CENVAT credit. By declaring drawback serial number suffixed with A or C and by making above stated declarations, the exporters consciously relinquished their IGST/ITC claims. As you are aware, the higher All Industry Rates (AIRs) under Duty Drawback scheme viz. As a result, the government contemplates are 20126 of 2018], the Gujarat High Court (‘HC’) has ruled that claim of duty drawback is not a valid reason for unreasonably withholding IGST refunds. Hence, Section 16 of the IGST Act, as well as the provisions of Section 54 of the CGST Act, have no application. Whether we are eligible for avail Input Credit for materials purchased ? After getting drawback & ROSL, the question of getting refund of GST does not arise. The Commissioner of Customs and Anr related GST refund where higher drawback claimed. The contents of this article are solely for informational purpose. As per the judgment of The Taxpayer is a Cotton Ginning Mill, engaged the business of procuring raw cotton from farmers, ginning the same, pressing the same, carrying out necessary process, converting it into bales and then exporting these cotton bales out of India. In order to claim refund, the Shipping Bill filed the Taxpayer shall be deemed to be an application for refund of IGST, as per Rule 96 of the. GST authorities directed to immediately sanction the refund of the IGST along with a 7% simple interest from the date of the Shipping Bill till the date of actual refund. Exports who Claimed Duty Drawback at Higher Rate . 450/ 119/2017-Cus IV Government of India Ministry of Finance Department of Revenue (Central Board of Indirect Taxes & Customs) Room No. Where exporters avail such option and provide a declaration while claiming the higher rate of drawback, it would not be justified allowing exporters to avail IGST refund after initially claiming the benefit of higher drawback. The Taxpayer is registered under the GST law. DISCLAIMER: The views expressed are strictly of the author and VJM & Associates LLP. No double benefit. Drawback is the refund of duties and taxes paid on inputs/raw materials used for the manufacture of exported goods and services. However, the same was not a permitted reason under the GST law to withhold refunds. They stated that the petitioner has claimed a higher duty drawback. The rationale for not allowing the refund of IGST for those exporters, who claim higher duty drawback is that the higher duty drawback reflects the elements of Customs, Central Excise and Service Tax taken together and since higher duty drawback is already being availed than granting the IGST refund would amount to double benefit as the Central Excise and Service Tax has been subsumed in the GST. 6. M/S Precot Meridian is a cotton exporter. And later, he repaid the amount along with interest and asked for a refund of the amount he paid as IGST. 20126 of 2018], Circular No.37/2018 – Customs dated 9 October 2018, G NXT POWER CORP VS UNION OF INDIA (WP (C) No 2981 of 2019 (W) dated 29, Company Law Compliances for newly incorporated Private Company, Applicability of GST on Remuneration to Director, Recent Changes in GST due to Corona Lockdown, CBIC notifies Due date and relaxations for filing GSTR-3B, CBIC clarified certain issues related to refund under GST, Denial of IGST refund for export goods through Foreign Post Offices, Financial assistance received in lieu of services to be provided by Indian subsidiary company to holding company in Germany is a supply of service, Transitional Credit- HC explains implication of directions to ‘consider’ a case, Webinar on Career Growth in Litigation Mgmt & IDT (GST) – Best Practices, All about Aadhaar Authentication for Existing GST Taxpayers, Section 44AD not eligible on Interest/Remuneration Income of Partner from partnership firm, AIFTP request for further extension of Income-tax due dates. The respondents, if commit default in payment of balance amount as directed by this judgment, the respondents will be obligated to pay interest @ 7% together with balance amount payable from the date on which a request for refund is made by the petitioner till the date of payment”. we used to availed duty drawback in the High rate i.e till 30/6/2017. rates and caps available under columns (4) and (5) of the Schedule of All Industry Rates of Duty Drawback have been continued for a transition period of three months i.e. A number of exporters were not aware of the implications and chose to be compensated for input taxes under the duty drawback scheme. No IGST refund to exporters if initially claimed benefit of higher drawback or where higher rate and lower rate were identical- CBIC. As the circular suggests, if an exporter consciously asks for a refund of the higher rate of duty drawback, he is not supposed to be entitled to IGST or ITC claims. 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