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2019 (11) TMI 160 - AAR - GSTRefund of IGST paid on export of goods - restriction introduced by Notification No. 3/2018 -Central tax (later substituted by Notification No.39/2018- Central Tax dated 04.09.2018 retrospectively from 23.10.2017) - export of goods for which corresponding inward supplies were procured at a concessional rate of 0.10% GST under Notification No. 40/2017- Central Tax (Rate), thereby holding that such restriction on IGST refund does not apply on export of goods which were procured on full payment of GST - Whether the above restriction prohibits refund of IGST paid in its entirety even on such exports where the goods have been procured on payment of full rate of GST by the person who procures only a small quantity of goods at concessional rate of 0.10% GST under Merchant Export Scheme as provided under Notification No. 40/2017- Central Tax (Rate)? HELD THAT:- The restriction is on the persons claiming refund of IGST paid that he must not have received supplies on which the benefit of the Government of India, Ministry of Finance notification No. 40/2017-Central Tax (Rate), dated the 23rd October, 2017 has been availed, and not related to the individual transactions. If the person has utilized the benefit of the said notification on his inward supplies, then he would not be eligible to the scheme of paying IGST on the export of goods and then claiming the entire amount of IGST paid as refund on such goods being exported. But this does not amount to denial of refund of input tax credit and he can always avail the benefit of zero-rated supplies on the basis of LUT. The scheme of Merchant Exports was brought into effect by Notification No. 40/2017 - Central Tax (Rate) dated 23.10.2017 and also other allied GST Notifications of State, which together allowed a registered exporter to procure goods at a concessional rate of 0.10 % GST. The applicant is intending to utilize the benefit of this notification to procure goods for exports. Hence sub-rule (10) of rule 96 has come into effect from 23.10.2017 which is also the date of effect of Notification No. 40/2017 - Central Tax (Rate) dated 23.10.2017. Hence there is an alignment of the Merchant Export scheme and the refund of IGST paid on exports - Hence it is clear that the persons who have procured goods utilising the benefits of the Notification No. 40/2017 - Central Tax (Rate) dated 23.10.2017 are not eligible to claim refund of the IGST paid on the export of such goods by virtue of the Rule 96(10). The persons who have procured goods by utilising the benefit of Notification No. 40/2017 - Central Tax (Rate) dated 23.10.2017 are not eligible to claim refund of the IGST paid on exports as per Rule 96(10) of the CGST Rules 2017 right from 23.10.2017, irrespective of the other transactions made by such person.
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