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Refund rejected for claim under 89(4) since few exports under advance authorisation - Goods and Services Tax - GSTExtract We are into the cashew manufacturing industry. We do export as well as local sales. In our export there will be export with advance authorisation and in some cases export against DFIA. We were filing refund applications under 89(4) (Export without payment of duty) till february 2021 in Central GST jurisdiction and we got the refund. We filed a refund application under the same rule for March 2021. A Jurisdictional officer issued SCN asking why refund can't be rejected since few exports under AA (expecting application has to be filed under rule 89(4B) since export includes Advance Authorisation).. We would like to bring into your notice that Rule 89(4B) is incomplete for beneficiaries of notification 79/2017 . Master circular 125/44/2019 is silent about the manner of computation of refund under rule 89(4B) . We have local sales (neither 89(4) nor 89(4b) applicable)as well (we are not 100% EOU). Hence the input tax credits cant be practically segregated based on utilization (say its difficult to identify which input service or inputs used for exports (either DFIA export or AA exports) or local sales. Formula given in the rule 89(4) is proper from all respects and the whole manner of application under rule 89(4) is explained properly under 125/44/2019 . Whereas 89(4B) even though the beneficiary amendment, is read and understood in a narrow mind set. Such interpretation will cause unnecessary delay in refund sanction and working capital block . Department is expecting the nexus of input and input services used in export. Need expert advice on the issue.
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