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Refund of ITC in case of Export with payment of Tax, Goods and Services Tax - GST
|Refund of ITC in case of Export with payment of Tax|
ITC availed on Goods Purchase 1 Lakh
ITC availed on services used 0.5 lakh
Total ITC availed 1.5 lakh
100% export with payment of tax
ITC used while filing GST Return 1.2 lakh
Now how to get 0.3 lakh ITC Refund. Can refund be applied in this case, if yes, how.
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Section 54 (3) of the CGST Act, 2017 reads as follows:
"Subject to the provisions of sub-section (10), a registered person may claim refund of any unutilised input tax credit at the end of any tax period:
Provided that no refund of unutilised input tax credit shall be allowed in cases other than––
(i) zero rated supplies made without payment of tax;
(ii) where the credit has accumulated on account of rate of tax on inputs being higher than the rate of tax on output supplies (other than nil rated or fully exempt supplies), except supplies of goods or services or both as may be notified by the Government on the recommendations of the Council:
Provided further that no refund of unutilised input tax credit shall be allowed in cases where the goods exported out of India are subjected to export duty:
Provided also that no refund of input tax credit shall be allowed, if the supplier of goods or services or both avails of drawback in respect of central tax or claims refund of the integrated tax paid on such supplies."
Accordingly, you cannot claim refund of unutilised ITC in given situation. You need to utilise it for future outward liability (i.e. against domestic supply and / or by exporting goods / services with payment of taxes and then, claiming refund of taxes so paid).
These are ex facie views of mine, the same should not be construed as professional advice / suggestion.
I agree with views shared by Ld. Amit Ji.
As per Sec. 54(8)(a), the refund of only the tax paid on export of goods or services or both or on inputs or input services used in making such export shall be available.
Unutilized ITC can not be claimed as refund and such ITC can be only utilized for future transactions.
If this is the limitation that you have then you must consider exporting under LuT. Here the timing of purchase and sale will have to be handled carefully to ensure that full credit refund in obtained.