Delay in recovery of Export Proceeds, Goods and Services Tax - GST

During the year the company has written off export debtors as bad debts (export of goods ) in the books of account I would like to check with you the impact of GST on such non-recovery of export proceeds.

Thanks

Rajalakshmi.V

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Showing Replies 1 to 15 of 17 Records

1 Dated: 13-4-2022 By:- KASTURI SETHI

In case export proceeds are not received, the supply will be treated as supply for home consumption and GST along with interest would be demanded by way of issuance of SCN. All export benefits will be forfeited.

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2 Dated: 13-4-2022 By:- V Rajalakshmi

Thank you sir

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3 Dated: 15-4-2022 By:- Amit Agrawal

Followings are my humble views:

1. Just because of non-receipt of consideration in convertible foreign exchange against goods exported (on account of bad debts), Dept. has got no legal provision in present GST law/s to demand GST on such supply.

1.1 Mere non-receipt of consideration in foreign exchange does not later status of this supply from 'Export of goods' to domestic supply.

2. If you have not claimed any refund of 'unutilised input tax credit or integrated tax paid' against such exported-goods, then, I feel that there is no adverse implications for you under present GST law just because of non-receipt of consideration in convertible foreign exchange in given scenario.

Above are strictly my personal views and same should not be construed as professional advice / suggestion.

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4 Dated: 16-4-2022 By:- KASTURI SETHI

Dear Sir,

It is not an issue of non-receipt of 'convertible foreign exchange' or 'Indian Currency'. Export proceeds NOT received.

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5 Dated: 16-4-2022 By:- KASTURI SETHI

Non-receipt of export proceeds means contravention of the provisions of FEMA.

Just for knowledge sake, case law is posted. Para no.7 is crucial.

2008 (9) TMI 216 - RAJASTHAN HIGH COURT NAZNEEN Versus DIRECTOR OF ENFORCEMENT, NEW DELHI

 

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6 Dated: 16-4-2022 By:- Amit Agrawal

Kindly allow me to rephrase my views. Followings are my humble views:

1. Just because of non-receipt of export-proceeds against goods exported (on account of bad debts), Dept. has got no legal provision in present GST law/s to demand GST on such supply.

1.1 Mere non-receipt of export-proceeds does not later status of this supply from 'Export of goods' to domestic-supply.

2. If you have not claimed any refund of 'unutilised input tax credit or integrated tax paid' against such exported-goods, then, I feel that there is no adverse implications for you under present GST law just because of non-receipt of export-proceeds in given scenario.

Above are strictly my personal views and same should not be construed as professional advice / suggestion.

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7 Dated: 16-4-2022 By:- KASTURI SETHI

Dear Sir,

Such situation calls for waiver from RBI otherwise the issue will not be closed.

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8 Dated: 16-4-2022 By:- Honey Vig

Sir, Read Rule 96B

 

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9 Dated: 17-4-2022 By:- Shilpi Jain

Rule 96B does not have any statutory provision backing till date. Provisions are proposed to be included in sec 16 of IGST Act, but these are not yet effective.

So agree with views of Mr. Amit as of now.

Also, suggested that in case the requierment is written off by RBI, as suggested by Kasturi sir, it would be safer position for the assessee.

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10 Dated: 18-4-2022 By:- KASTURI SETHI

Govt. has gained nothing by such export. Needless to say Govt. provides incentives/benefits to the exporters for earning foreign exchange.Hence the very purpose of export is defeated in allowing export.

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11 Dated: 18-4-2022 By:- V Rajalakshmi

The refund of ITC has been claimed by the company for the given year, so I am also of the view that at least the refund claimed in proportionate to the turnover written off to be added to the liability, kindly share your views, please.

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12 Dated: 18-4-2022 By:- KASTURI SETHI

No doubt about recovery of refund by the department in the absence of export proceeds. To qualify the supply as export, all conditions should be fulfilled.

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13 Dated: 19-4-2022 By:- Ganeshan Kalyani

I agree with the view of experts.

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14 Dated: 23-4-2022 By:- Shilpi Jain

It is only when there is ambiguity in the law, purposive interpretation should be resorted to.

The fact that there is no condition in the law to receive CFE for export of goods to be zero-rated, that condition cannot be attached to deny refund.

The option that Govt always has is amend the law retrospectively. Else cannot deny

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15 Dated: 28-4-2022 By:- V Rajalakshmi

what will be the impact if the exporter exports the goods without availing LUT and take the route off with payment of tax?

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