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2023 (6) TMI 744 - AUTHORITY FOR ADVANCE RULING, TELANGANARefund - Zero rated supplies - Computation of Turnover - sale of duty credit e-Scrips - Interpretation of Statute - Rule 42, Rule 89(4) and Rule 89(4B) of the CGST Act - Whether sale of duty credit e-Scrips is only other income and not form part of Turnover? - HELD THAT:- A ‘Duty Credit Scrip’ is a certificate (or scrip), is an export promotion benefit, offered by Government of India under the Foreign trade policy, which can be used for the payment of Customs Duty. These scrips, which are issued to both the exporters of goods as well to exporters of services under the various schemes mentioned in the Foreign Trade Policy, can be transferred to others if they cannot be utilised by the taxpayer for various reasons - The Notification no. 02/2017- Central Tax (Rate) dated 28.06.2017 which provided list of goods which were exempted from payment of GST was amended vide Notification No. 35/2017- Central Tax (Rate) dated 13.10.2017 to include a new entry of ‘Duty Credit Scrips’ under the HSN ‘4907’ at Serial No. 122A. Thus the ‘Duty credit scrips’, which are classified under the category of goods, are exempted from payment of Goods and Service tax vide the notification No. 35/2017- Central Tax (Rate) dated 13.10.2017. The sale of ‘Duty credit scrips’, which are classified under the category of goods, are exempted from payment of Goods and Service tax vide the Notification No. 35/2017- Central Tax (Rate) dated 13.10.2017 after amendment of the Notification no. 02/2017- Central Tax (Rate) dated 28.06.2017 which provided the list of goods which were exempted from payment of GST. Sale of ‘Duty credit scrips’ in Domestic tariff area is classified as exempted supply as per the above Notification dated 13.10.2017. Therefore it is pertinent to note that the turnover pertaining to sale of ‘Duty credit scrips’ should be reduced from the total turnover in the state as defined under clause (112) of section 2 for computation of the ‘Adjusted Total Turnover’ as per Rule 89(4) of CGST Rules’ 2017. As per Rule 89(4B) of the CGST Rules’ 2017 Where the person claiming refund of unutilised input tax credit on account of zero rated supplies without payment of tax has received supplies on which he has availed the benefit of the notification No. 40/2017-Central Tax (Rate) dated 23rd October, 2017 or notification No. 41/2017- Integrated Tax (Rate) dated 23rd October, 2017 or availed the benefit of notification No. 78/2017-Customs, dated 13th October, 2017 the refund of input tax credit, availed in respect of inputs received under the said notifications for export of goods and the input tax credit availed in respect of other inputs or input services to the extent used in making such export of goods, shall be granted. This mandates to compute the amount of refund of input tax credit pertaining to only those inputs received under the said notifications and other inputs or input services, only, to the extent used in making such export of goods - the relevancy of the turnover pertaining to the sale of ‘Duty credit scrips’ does not arise in the computation of the refund of input tax credit, availed in respect of inputs received under the said notifications for export of goods and the input tax credit availed in respect of other inputs or input services to the extent used in making such export of goods.
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