No IGST refund to exporters if initially claimed benefit of higher drawback or where higher rate and lower rate were identical- CBIC. The shipping bill that exporter may file is deemed to be an application for refund of integrated tax paid on the goods exported out of India and claim for refund can be withheld on the following contingencies: A request has been received from the jurisdictional commissioner of CGST, SGST or UTGST to with hold the payment of refund due to the person claiming refund in accordance with the provisions of subsection (11) of Section 54 or. The outward supplies made by the Taxpayer are taxable under the GST law. This facility is available for all registered persons except those registered under TDS, TCS and Non-resident Tax payers (NRTP). the proper Customs officer determines that the exports were in violation of the relevant provisions of the Customs Act, 1962. Question 2: Is Drawback at a higher All Industry Rate (AIR) admissible if an exporter has not availed Input Tax Credit of GST or refund of IGST paid on exported goods ? F. No. Hence Applicant is eligible for refund in excess of drawback claimed. Where to invest money in India (to make it work for you)? Then further judgement states that if claim of the applicant is to be rejected only on basis of. 450/ 119/2017-Cus IV Government of India Ministry of Finance Department of Revenue (Central Board of Indirect Taxes & Customs) Room No. No exporter would prefer to take benefit of 0.85% Duty Drawback against refund of IGST/ Input GST which was at least 5%. However, the respondents were relying on a Government circular. Now exporters have paid GST of at least 5% on inputs or would have charged 5% IGST. Goods entered for domestic consumption on which a refund of excise duty can be claimed include goods: It’s evident that the taxpayers have to pay the refund of IGST on their goods that they export to Bangladesh regardless of the claiming of duty draw. Higher duty drawback availed: The Taxpayer is not entitled to claim the refund of the IGST paid as the higher duty drawback was availed. And they needed to consider the Shipping Bills as an application for the taxpayers’ IGST refund. This will … Even then, in respect of one shipping bill, both benefits can be claimed simultaneously after 01.10.2017. For exports during this period, exporters can claim higher rate of duty drawback (composite AIR) subject to conditions that no input tax credit of CGST/IGST is claimed, no refund of IGST paid on export goods is claimed and no CENVAT credit is carried forward. case of M/S. A reading of these Notifications and Rules would suggest that in all cases where IGST refund is availed, the authorities concerned may not allow a higher rate of drawback. A declaration from exporter and certificate from jurisdictional GST officer in this regard has been prescribed in the notification related to AIRs. Further, wherever the wordings, “Drawback when CENVAT facility has been availed” are used, it means that the exporter is eligible only for the Customs portion of duty drawback. be withheld under particular circumstances. It has to be paid back. In Québec, Revenu Québec administers the GST… Join our newsletter to stay updated on Taxation and Corporate Law. The duties and taxes neutralized under the scheme are, (i) Customs and GST in respect of inputs and. Moreover, there is no rule for allowing a higher duty drawback refund. The Taxpayer is entitled to refund of IGST paid on goods exported to Bangladesh even if duty drawback was claimed. According to the petitioner, on enquiry, it was found that IGST refund was pending for the reason that the petitioner has availed drawback at higher side i.e., Composite Rate. 0% on Supply. Amit Cotton Industries [R/ Special Civil Application No. Goods entered for domestic consumption on which a refund of excise duty can be claimed include goods: In short, a supplier availing drawback of inly basic customs duty shall be eligible for refund of unutilized ITC. 4. 6. Exports who Claimed Duty Drawback at Higher Rate . 9. 4,80,355/- as IGST. Drawback is the refund of duties and taxes paid on inputs/raw materials used for the manufacture of exported goods and services. it does not have the authority under the existing provisions of GST law. In order to claim refund, the Shipping Bill filed the Taxpayer shall be deemed to be an application for refund of IGST, as per Rule 96 of the. As per the GST framework, the GST acts as a consumption based tax and hence, the end customer becomes liable for the payment of Goods and Services Tax. Refund of ITC shall not be allowed if supplier of goods/services avails of drawback in respect of CGST or claims refund of IGST paid on such supplies. 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. But initially, he availed higher duty drawbacks wrongly. Gujarat HC directs Revenue to “immediately sanction” IGST refund on export of Rope Making Machine [HSN Code 84794000] i.e. Rule 96 is relevant for two purposes. Circular No 37/2018-Customs. Zero- rated supplies without payment of Tax and Supplies under Inverted Duty Structure (IDS).Ms. This facility will enable a taxpayer (whether supplier or recipient) to send a message to another registered person (whether supplier or recipient) through the GST portal itself. shall only be brought by an alteration of the current terms of GST law. 5. “CBIC is committed to help GST Taxpayers/Exim Trade during #COVID19. Further, the duty drawback scheme shall continue and exporters undertaking exports during this period can claim a higher duty drawback. Importers registered by the Australian Taxation Office for GST purposes may be entitled to an input tax credit on creditable importations. In the instant case, the petitioner has wrongly availed the higher duty drawback to the tune of Rs. 29 May 2020 Exporters can claim higher rate of duty drawback (composite AIR) subject to conditions that no input tax credit of CGST/IGST is claimed, no refund of IGST paid on export goods is claimed and no CENVAT credit is carried forward. There is an understanding the inputs credit is not available where output is not taxable or at nil rate. Refund of ITC shall not be allowed if supplier of goods/services avails of drawback in respect of CGST or claims refund of IGST paid on such supplies. M/S Precot Meridian is a cotton exporter. The single bench under Justice M. Govindaraj made their decision in the case of M/S Precot Meridian Limited vs. Alongside, there is not even an option available that will help taxpayers to consider the IGST refund claim as non-acceptable. statute. One, of a division bench of Gujarat High Court at Ahmedabad, and the other is from a Judgement made by Supreme Court. A circular can not prevail over the Required fields are marked *, Notice: It seems you have Javascript disabled in your Browser. rates and caps available under columns (4) and (5) of the Schedule of All Industry Rates of Duty Drawback have been continued for a transition period of three months i.e. RFD-01. Counterparty can send his reply using the same feature. 1.7.2017 to 30.9.2017 (Circular No.22/2017-Customs dated 30.6.2017). Could you please clarify my following query . Further, the entire refund is system-managed and it cannot be manually operated. Several cases … No double benefit. Maintained by V2Technosys.com, Taxguru Consultancy & Online Publication LLP, 509, Swapna Siddhi, Akurli Road, Near Railway Station, Kandivali (East), Higher Rate of Duty Drawback & IGST Refund under GST Regime, M/s. Also, to claim refunds, taxpayers need to file their Shipping Bills, and they need to deem that as an application for a refund of IGST. Where the government contemplates expanding the scope of the restrictions for grant of refund, the same may have to be brought only by way of an amendment to the existing provisions of GST law. GST Refund for Exporters – Duty Drawback Scheme. Section 54 of the CGST Act and Section 16 of the IGST Act ruled out that the GST authorities needed to process and issue the refund IGST paid on the export of goods without any delay. The input tax credit is claimed via the Business Activity Statement. See the definition of' 'refund' under Section 54 and 55 of CGST Act. 13/2020–Central Tax dated 21st March, 2020, amended from time to time, every registered person who. The rationale for not allowing the refund of IGST for those exporters, who claim higher duty drawback is that the higher duty drawback reflects the elements of Customs, Central Excise and Service Tax taken together and since higher duty drawback is already being availed than granting the IGST refund would amount to double benefit as the Central Excise and Service Tax has been subsumed in the GST. In short, a supplier availing drawback of inly basic customs duty shall be eligible for refund of unutilized ITC. Once the exporter draws higher duty drawback, the system automatically scrolls out IGST refund. In the case of exports, the end consumer of the goods or services would be not in India and GST would not be applicable. Read Also: GST on Purchase and Sale of second hand used goods – Margin Scheme of the IGST refund and higher duty drawback. a request has been received from the jurisdictional GST officer to withhold the IGST refund payment due to claim of refund under Section 54(10) or 54(11) of the CGST Act. We are exporting against Letter of Undertaking without paying GST. 01.01.2021, Auto population of E-Invoice details in GSTR-1/2A/2B/4A/6A, Online communication on GST portal | Facility between Supplier and Recipient, Uploading Show Cause Notice and Order on GST Portal is Mandatory | SCN and order sent via email only is invalid, Analysis of New RBI Monetary Policy, 2020 & few recent changes by RBI. In the Because relevant circulars were not brought to their notice either by their GST advisers … We exported certain goods without GST payment under letter of undertaking. The technicalities of the new rules clearly showcase that, claiming for the benefits of the IGST law was a wise idea. If exporter has wrongly mentioned A, the GST refund for the month of July-Sept is denied while the exporter has not claimed higher drawback since both rates of drawback are the same. Accordingly, if the goods which are exported as subject to export duty or any drawback is to be claimed on such exports, refund of utilized ITC may not be available. Sir, As per proviso 3 of Section 54 (3) of CGST Act, 2017 "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.". The contents of this article are solely for informational purpose. This also leads to a higher cost of exports. Export of goods/services with LUT (without payment of Tax) Rule 89rws Section 54 of CGST Act. the HC, it has been clarified that the IGST refunds legal position is needed to Happy to Share for the benefit of all, that today in the matter of Petitioner is M/s Precot Meridien Limited. According to GST Law, the following provisions would apply under the GST regime for the deemed exports in relation to the refund of the Terminal Excise Duty (TED) and Drawback (DBK). Several goods exporters across the country could not avail of their ITC refund for a period of July 17 to September 17. We are availing duty drawback in the lower rate (from 1/7/2017 onwards), earlier. John Varrghese by way of reply submits that the respondents if insist upon refund of higher rate of duty drawback by the petitioner with interest, the respondents are also required to pay interest to petitioner from the date on which the petitioner requested for refund of IGST. The Board has observed that – Exporters had availed the option to take drawback at higher rate in place of IGST refund out of their own volition. Unreasonable delays in grant of refund of Integrated Goods and Services Tax (‘IGST’) has impacted several exporters in the recent past. 2. Relief for exporters: Higher duty drawback rates to offset taxes 0 December 7, 2017 11:10 am NEW DELHI: Exporters hit by the sharp decrease in duty drawback rates on various items following implementation of the Goods and Services Tax (GST) regime would soon get some relief as the government is finalising higher rates to compensate for embedded taxes. Refund of excess duty drawback is a unilateral action: Refund of the differential duty drawback by the Taxpayer is a unilateral act by the Taxpayer not recognized under … After getting drawback & ROSL, the question of getting refund of GST does not arise. All Rights Reserved. A brief idea about drawback on deemed exports under GST regime, TED refund against deemed exports under GST etc. Details of drawback claim criteria, exclusions, who can claim, drawback … Restriction on value to 1.5 of the value of domestic goods. Leave your Name, email, Phone number along with what you are looking for in message box or you can call us at 011-41715118, Copyright (c) 2014-2020 | All Right Reserved | VJM & Associates LLP, Circular can not prevail over the statute, HC allows IGST refund where higher rate of drawback claimed, 405-406, 4th Floor, Raja House, Nehru Place, New Delhi - 110019, Financial Structuring & Restructuring Services, RoDTEP (Remission of Duties and Taxes on Exported Products) | Applicable w.e.f. Refund. The Taxpayer has also furnished the relevant export details in the monthly returns in Form GSTR-3B. 1.7.2017 to 30.9.2017 (Circular No. 229 A, North Block For information regarding GST/HST, please visit the Canada Revenue Agency (CRA) Web site. In order to submit a comment to this post, please write this code along with your comment: dac2acee488b95396072228aac95a7c1. The Madras Court directed the Respondent to refund the amount paid as IGST by M/S Precot Meridian Ltd. for the goods they exported from India since it falls under “zero-rated supplies.” The court has directed that the petitioner has to get the refund within six weeks from the date of receipt. The rationale for not allowing the refund of IGST for those exporters, who claim higher duty drawback is that the higher duty drawback reflects the elements of Customs, Central Excise and Service Tax taken together and since higher duty drawback is already being availed than granting the IGST refund would amount to double benefit as the Central Excise and Service Tax has been subsumed in the GST. At present, two rates of drawback are prescribed - “Drawback when CENVAT facility has not been availed” and “Drawback when CENVAT facility has been availed”. Where exporters avail such option and provide a declaration while claiming the higher rate of drawback, it would not be justified allowing exporters to avail IGST refund after initially claiming the benefit of higher drawback. As the circular suggests, if an exporter consciously asks for a refund of the higher rate of duty drawback, he is not supposed to be entitled to IGST or ITC claims. The respondents are given liberty to adjust the amount already availed by the petitioner on account of higher rate of duty drawback and pay the balance of IGST payable to petitioner within six weeks from the date of receipt of a copy of this judgment. The Commissioner of Customs and Anr related GST refund where higher drawback claimed. Hence, Section 16 of the IGST Act, as well as the provisions of Section 54 of the CGST Act, have no application. Under such a scheme, reimbursement of such taxes/duties/levie, paid at the central/ state/ local level, shall be granted which is not refunded in any other mechanism. exporter should benefit more than it should be in the same transition. They stated that the petitioner has claimed a higher duty drawback. ITC and refund allowed. To facilitate the provision of After getting drawback & ROSL, the question of getting refund of GST does not arise. Wide Notification No. It has been noted that exporters had availed the option to take drawback at higher rate in place of IGST refund out of their own Considering the fact that exporters have made aforesaid declaration while claiming the higher rate of drawback, it has been decided that it would not be justified allowing exporters to avail IGST refund after initially claiming the benefit of higher drawback.There is no justification for re … The reason being the GST refund where higher drawback claimed a higher rate of drawback, this has been a major concern for the whole exporter community. The Taxpayer is a Cotton Ginning Mill, engaged the business of procuring raw cotton from farmers, ginning the same, pressing the same, carrying out necessary process, converting it into bales and then exporting these cotton bales out of India. Refund for a period of July 17 to September 17 please visit the Canada Revenue Agency CRA. 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