Page 45 - GSTL_21st May 2020_Vol 36_Part 3

2020 ] REFUND AMOUNT CURTAILED BY PROCEDURES J71

REFUND AMOUNT CURTAILED BY
PROCEDURES
By
CA Akbar Basha

During the days prior to GST, an expectation was
created among the taxpayers that the GST refund will be
seamless, which created a huge expectation among the
industry. As time has passed by, as gap has come up be-
tween expectation and actual experience of getting re-
fund. The gap is created due to procedural difficulties,
which has shrunk the refund being given to the industry.
In this article an attempt is made to bring out the shortcomings of the
procedures which is preventing the industry, from getting the refund which oth-
erwise the industry is rightly entitled to.
Exporters denied refund of ITC under LUT with respect to transitional
credit : Rule 89(4)(B) of CGST Rules, defines “Net ITC” means input tax credit
availed on inputs and input services during the relevant period other than the
input tax credit availed for which refund is claimed under sub-rules (4A) or (4B)
or both;
This rule indicates refund only for inputs and input services availed dur-
ing the relevant period of refund, will be allowed as refund, which means the
ITC on capital goods and transitional credit is barred from claiming refund. This
aspect was clarified in Circular No. 125/44/2019-GST, dated 18-11-2019, by
which those who export all their service products could not claim the benefit of
transitional credit. As such exporters do not have any domestic liability, there-
fore transitional credit remain only as book entry.
Now the exporter has option No. 2 to export goods or service on pay-
ment of IGST, however Rule 96(10) had imposed certain conditions, like exporter
should not have received the supplies as under -
• U/n 48/2017-C.T., dated 18-10-2017, (supplies treated as deemed
exports)
• U/n 40/2017-C.T., dated 23-10-2017, (supply of goods to exporter at
concessional rate of 0.05% or 0.10%)
• U/n 78/2017-Cus., dated 13-10-2017, provided that if an exporter
had paid IGST and Compensation Cess on imports and claimed ex-
emption of BCD on imported goods, then the benefit of 78/2017-
Cus. would be treated as not availed. This relaxation was extended
retrospectively with effect from 23-10-2017. However few questions
remain even now such as whether the benefit of explanation insert-
ed to Rule 96(10) be available to exporters only if the imported
goods had suffered IGST and Compensation Cess on imports or
whether this explanation be applicable to goods imported which
did not suffer Compensation Cess.
GST LAW TIMES  21st May 2020  45