Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding


  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram
Discussions Forum
Home Forum Goods and Services Tax - GST This
A Public Forum.
Anyone can participate to share knowledge.
We acknowledge the contributions of Experts/ Authors.

Submit new Issue / Query

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

Issue Id: - 117907
Dated: 12-4-2022
By:- V Rajalakshmi

Delay in recovery of Export Proceeds


  • Contents

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

Posts / Replies

Showing Replies 1 to 19 of 19 Records

Page: 1


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.


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

Thank you sir


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.


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.


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

 


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.


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

Dear Sir,

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


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

Sir, Read Rule 96B

 


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.


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.


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.


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.


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

I agree with the view of experts.


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


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?


16 Dated: 2-5-2022
By:- Amit Agrawal

W.r.t. last post from Ms. V Rajalakshmi, my views are as under:

A. Rule 86B (inserted vide Notification No. 16/2020 – Central Tax dated 23-03-2020) - at best - covers the situation where refund of 'ITC' was claimed against goods exported without payment of taxes under LUT (i.e. under clause (a) of unamended Section 16 (3)).

B. Said Rule 86B does not cover situation where goods were exported with payment of taxes and refund was claimed against taxes so paid (i.e. under clause (b) of unamended Section 16 (3)).

C. Amended Section 16 (3) (as inserted vide Finance Act, 2021) is NOT yet made operational.

Hence, there is no legal mechanism available to GST Dept. to recover refund already granted to your client (i.e. refund of taxes paid by your client against 'goods exported' under clause (b) of unamended Section 16 (3)).

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


17 Dated: 2-5-2022
By:- Amit Agrawal

There is mistake in above post of mine. Said Rule 86B indeed prescribes recovery of refund granted even against 'goods exported' under clause (b) of unamended Section 16 (3). My apologies!


18 Dated: 19-2-2023
By:- Sanjay Palapu

Can we get the refund of ITC paid on delayed receipt of proceeds under the LUT for services?

Thanks

Sanjay


19 Dated: 19-2-2023
By:- Amit Agrawal

Dear Shri Sanjay Palapu Ji,

To get better responses to your query and not to get mixed up / confused with fact/s of any other query, it is suggested that you should raise a separate / independent query sharing all your relevant facts and points of doubt / concern.


Page: 1

Old Query - New Comments are closed.

Quick Updates:Latest Updates