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Incentive Scripts and Reversal of ITC, Goods and Services Tax - GST

Issue Id: - 115966
Dated: 2-2-2020
By:- Narendra Soni
Incentive Scripts and Reversal of ITC

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We are exporter,We received MEIS scripts from DGFT as incentive, sold which are transfeble to others,hence we sold these scripts on which GST is exempted.

My query is whether any proportionate ITC is liable to reverse.

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Posts / Replies

Showing Replies 1 to 9 of 9 Records

1 Dated: 3-2-2020
By:- Ganeshan Kalyani

Yes, proportionate credit reversal is required.


2 Dated: 4-2-2020
By:- KASTURI SETHI

Ultimately, duty credit scrips are to be used for payment of Customs duty.In my view, proportionate reversal of ITC is not required. Duty credit scrips are rewards earned as export incentive under MEIS and SEIS.


3 Dated: 5-2-2020
By:- Narendra Soni

Dear Sir,

Agreed, it is incentive, not supply hence proportionate ITC need not to revers.

However, our CHA has registered the MEIS script with Customs authority and charge service amount with GST, I think the ITC on that bill is not eligible to us ??,kindly confirm


4 Dated: 5-2-2020
By:- KASTURI SETHI

Sh.Soni Ji,

Why do you think so ? What is reasoning ? What is brewing in your mind ? Pl. share here. In my view, in this scenario ITC is allowed as this input service conforms to the parameters laid down in Section 16(1) of CGST Act. It is in the course of business. It is not hit by Section 17 of CGST Act as well.


5 Dated: 5-2-2020
By:- Narendra Soni

Dear Sir,

Because GST on sale of MEIS script is exempted. We are not paying GST at the time of sale of it then how we can avail ITC which accrued on account of MEIS script.

Kindly confirm my logic is correct or not to avoid litigation by department.


6 Dated: 6-2-2020
By:- KASTURI SETHI

Dear Sir,

You have said above, "CHA is charging service amount with GST". Pl. elaborate/clarify.


7 Dated: 11-2-2020
By:- Narendra Soni

To sell/use of MEIS, it required to register with Customs authority and this work is done by our CHA for which he raise bill of services with GST to us.

Can ITC is eligible on such CHA bill.


8 Dated: 12-2-2020
By:- KASTURI SETHI

Authority regarding non-reversal pertaining to pre-GST era.

Duty credit scrip - Reversal of amount under Rule 6(3) of Cenvat Credit Rules not applicable

Circular No. 973/7/2013-CX., dated 4-9-2013

 


9 Dated: 13-2-2020
By:- KASTURI SETHI

In my view ITC is admissible. If you have even an iota of doubt, file an application with AAR. Dust will be settled once for all.


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