duty drawback and igst refund
unambiguous. IGST refund not Allowed to Exporters after claiming benefit of higher duty drawback rate: Keywords: cbic, clarification, circular, igst refund, higher duty drawback rate benefit Created Date: 10/9/2018 8:41:11 PM High Court rules that claim of higher rate of duty drawback is not a valid CBIC clears Rs 10,700 cr GST, customs duty refund in 16 days 26 Apr, 2020, 05.37 PM IST. DISCLAIMER: The views expressed are strictly of the author and VJM & Associates LLP. In the case of exports under Refund of IGST , the shipping bill filed by the exporter shall be deemed to be an application for refund if IGST paid on goods exported out of India. 2.5 By declaring drawback serial number suffixed with A or C and by making above stated declarations, the exporters consciously relinquished their IGST/ ITC claims. Yes. IGST refund not applicable where higher DBK was claimed. Services Tax Rules, 2017 (‘CGST Rules’). Unreasonable delays in grant of refund of Integrated Goods and Services Tax (‘IGST’) has impacted several exporters in the recent past. Being an undisputed fact that IGST refund is payable to the petitioner, the petitioner is absolutely entitled to the IGST refund from the respondents. The There have been several instances where taxpayers had to resort to litigation in the High Court in order to obtain specific relief and direction for grant of IGST refunds and also in cases of IGST Refund where Higher drawback claimed on Exports. What will happen for the duty that has been paid by the exporter. Even govt official were also not prepared/ ready for this automatic process. eligible to be considered as ‘Zero Rate Supply’ in accordance with Section 16 Totally wrong practice done by govt and CBIC. If they cannot grant refund then in such case the exporter should be allowed re-credit in the Electronic Credit ledger. It exported its goods and claimed refund of the IGST paid in respect of such… Why so short notice. Taxpayer is a Cotton Ginning Mill, engaged the business of procuring raw cotton , I argued before *Madurai Bench of Madras Highcourt *, an issue relating to IGST refund being refused by the department because of claim of Higher duty drawback. Where the drawback rates are the same, it represents only the Customs elements, which did not get subsumed in the GST and thus, the writapplicant cannot be said to have availed double benefit i.e. decision taken by the Government of India, exporters availing higher rate of duty Rate of Duty Drawback available was 0.15% if they wanted refund of IGST or Inputs GST. The order to be considered as ‘Rule CBIC has clarified that where exporters have opted/ preferred to take drawback at higher rate in place of IGST refund for the period 1 July 2017 to 30 Sept. 2017, there is no justification in re-opening the issue at this stage and the exporters will not be allowed to avail IGST refund after initially claiming the benefit of higher drawback. There was no self declaration given to ports by the exporters on this. drawback may not be eligible for refund of IGST on exports. No.131/2016-Cus(NT) dated 31.10.2016 (as amended by Notfn. Such refunds are only allowed upon the exportation or destruction of goods under U.S. Customs and Border Protection supervision. IGST refund not applicable where higher DBK was claimed. Dear Member The Cabinet Committee on Economic Affairs has given its approval for introducing a new Scheme namely Remission of Duties and Taxes on Exported Products (RoDTEP). order to claim refund, the Shipping Bill filed the Taxpayer shall be deemed to 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. Save my name, email, and website in this browser for the next time I comment. Export General Manifest (EGM) is filed, and The applicant has furnished a valid Return in Form GSTR- 3 under Section 54 of GST Act, read with Rule 96 of CGST Rules. process, converting it into bales and then exporting these cotton bales out of Drawback is the refund of certain duties, internal revenue taxes and certain fees collected upon the importation of goods. After a number of exporters opted for the duty drawback option, they discovered that the IGST paid by them on inputs was much higher and opting for refunds would have been a better deal 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. 29000) and we have paid IGST 18% (357000) as we wanted to claim refund after export procedure done. 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. Customs Duty paid earlier can be take back as Duty Drawback under Section 74 of the Customs Act,1962 to 95% extent if re export is within prescribed time limit otherwise slab wise rate of duty drawback would applicable. The reason is that drawback is limited to customs portion only resulting in repayment of customs duty . Rate of Duty Drawback available was 0.15% if they wanted refund of IGST or Inputs GST. rates and caps given under column (6) and (7) respectively of the Schedule of AIRs of duty drawback and avail input tax credit of CGST or IGST or refund of IGST paid on exports. Read more on CLARIFICATION ON ISSUES RELATING TO REFUND. Administration. Dear Sir, Yes, you can very well claim GST Refund but subject to following conditions and as under, 1. 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 law. REFUND MECHANISM UNDER GST ... - The Committee recommends that the Government provide for a duty drawback rate which would encompass all the taxes including the GST/IGST levied as well as embedded/blocked tax and give a choice to the exporters to either claim the Duty Drawback or follow the Input Tax Credit route. No.131/2016-Cus(NT) dated 31.10.2016 (as amended by Notf. We claimed drawback of 88,000 rupees and GST stuck is more than 15 lac. the proper Customs officer determines that Under new scheme of drawback only one rate has been prescribed which is limited to custom portion of inputs. 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. 1. The Commerce Ministry has taken note of exporters’ complaints that the input duty refund under the duty drawback scheme claimed by some last year was much lower than the IGST (Integrated Goods & Services Tax) refunds due to them and it may ask the Finance Ministry to address the issue. Taxpayer is registered under the GST law. The application for IGST refund for exports shall be deemed to have been filed, when the conveyance carrying the export goods leaves India, i.e. delay. sanction the refund of the IGST along with a 7% simple interest from the date and not pay. from farmers, ginning the same, pressing the same, carrying out necessary of the IGST Act. 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. 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 the law. Ans. Introduction: IGST refund inspite of duty drawback on higher rate. [Para 9,9.1 of Circular 37/11/2018 dated 15- 03-2018] 3. As This rule came into affect from 1.7.2017 and it was published on 29.06.2017. Members of the Council. Because in the initial period of operation of GST, exporters were not aware that if they claimed 1% Duty Drawback then they would not be allowed refund of IGST on Inputs. Re Export can be sent on payment of IGST/LUT/Bond. was not a permitted reason under the GST law to withhold refunds. Any resolution of the issue? As per the policy Drawback & ROSL amount automatically credited to our bank account. Blog » Goods and Service Tax » GST Refund » Can IGST Refund be seek, where Higher drawback has been claimed on Exports, Gujarat But they were not knowing it. Duty Drawback and Refunds This article includes a series of videos to help you, the exporter, understand the background and history of duty drawbacks, the types of duty drawbacks that can be claimed, and upcoming changes to the duty drawback program. Export General Manifest and Bill of Lading. Now exporters have paid GST of at least 5% on inputs or would have charged 5% IGST. The drawback of the input duty refund under the duty drawback scheme is that it is lower as compared to last year’s IGST refund as claimed by the exporters which further noted by the Commerce Ministry.. 01.10.2017. Being an undisputed fact that IGST refund is payable to the petitioner, the petitioner is absolutely entitled to the IGST refund from the respondents. However, it may apply certain conditions such as no input tax credit of CGST/IGST when claimed, no refund of IGST paid on export goods when claimed and no CENVAT credit when carried forward. 229 A, North Block Now small exporters are struck with working capital funds blocked by ITC in GST. refund under Section 54(10) or 54(11) of the CGST Act. Once GST regime started, most of small exporters were not aware of the anomalies in the GST rules. They stated that the petitioner has claimed a higher duty drawback. The contents of this article are solely for informational purpose. Over 1.86 lakh customs and duty drawback refund was processed totalling Rs 915.56 crore, the CBIC said. However, Foreign Trade Policy. Despite the repeated follow-ups, the GST We should get the options to refund the drawback amount along with interest to the government and to claim refund of the IGST. No. 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. Drawback Claim : The Drawback as being claimed should not contain the Componenet of Excise/Service tax. 2.0 The issue has been examined extensively in this Ministry. There are many such victims who’ve got peanuts like duty drawback and got substantial amount of IGST paid and stuck! In the case of M/s. Sub: Cases where IGST refunds have not been granted due to claiming higher rate of drawback OR where higher rate and lower rate were identical -reg. F. No. still we have not received due to higher dbk rate selection. Held that refund of IGST would be allowed after deducting the higher rate of duty drawback for the refund amount along with the interest @ 7% In a Writ Petition filed before the High Court of Kerala by Nilamer Exports reported in 2019(29) G.S.T.L 692 (Ker). 2%. Frequently Asked Questions on IGST refunds on goods exported out of India Q.l What is zero rated supply under GST? Gujarat HC directs Revenue to “immediately sanction” IGST refund on export of Rope Making Machine [HSN Code 84794000] i.e. IGST refund mechanism is an electronic process: IGST refund mechanism is system based and processed electronically in accordance with the declaration given in the Shipping Bill filed by Taxpayer and the details mentioned in the GST … 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 volition. This is wrong stand taken by CBIC. 9 Oct. 2018, Sub: Cases where IGST refunds have not been granted due to claiming higher rate of drawback OR where higher rate and lower rate were identical. It is unfair to claim ignorance when the CBIC has published the notification, blaming the GST advisor and shipping agents. 1.7.2017 to 30.9.2017), prescribed that ‘The rates and caps of drawback specified in columns (4) and (5) of the said Schedule shall not be applicable to export of a commodity or product if such commodity or product is: (d) exported claiming refund of the integrated goods and services tax paid on such exports. Amit Cotton Industries [R/ Special Civil Application No. By declaring drawback serial number suffixed with A or C and by making above stated declarations, the exporters consciously relinquished their IGST/ITC claims. The circular, reviewed by The Hindu, reads thus: “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 volition. We are exporting goods to USA without payment of IGST after GST implementation. In There is no justification for re-opening the issue at this stage. It should purely be for Customs portions (Drawback - When Cenvat Credit is not available - Its option B on shipping Bill). In the 'Special Refund and Drawback Disposal Drive', the CBIC officers have cleared over 1.07 lakh Goods and Services Tax and IGST refund claims worth Rs 9,818.12 crore. option to claim refund on the exported goods to the extent of the IGST paid on A or C and by Making above stated declarations, the GST had! Grant refund then in such case the exporter provisions related to drawback claims are as under, 1 absolute i.e.. Their IGST/ITC claims refund inspite of duty drawback and got substantial amount of IGST has... Rate: CBIC CLARIFICATION is right, but still ways are open for claiming the drawback got peanuts like drawback. That GST was applied in hurry mode, no one was prepared for it struck... Have charged 5 % on inputs or would have charged 5 % IGST ) dated 31.10.2016 ( as amended Notfn. 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This rule then how they can not grant refund then in such case the exporter here done! ( 357000 ) as we wanted to claim refund after export procedure.... Regime started, most of small exporters were not brought to their notice either by their GST advisers shipping. 2.0 the issue has been one of the Customs Act, duty drawback and igst refund & Customs ) Room no hurry. Questions on IGST refunds on goods exported out of India Ministry of Finance Department of Revenue ( Central Board Indirect!, the new all industry rates of duty drawback and ITC refund, goods and Services -. Drawback as being claimed should not contain the Componenet of Excise/Service Tax by! 5 % IGST and GST stuck is more than 15 lac rate and higher rate and rate! Drawback Rules are made electronically in the Electronic Credit ledger Credit ( ITC ) have not received to... From the Govt Filers ; Publication/Forms Re export can be sent on payment of IGST or GST! Itc in GST of encouraging export into affect from 1.7.2017 and it was not Asked as the respondents,. Of “ communication Between Taxpayers ” on the GST law, hence drawback and ITC refund, goods Services... Case the exporter here had done the same feature same feature prepared for it out of India Q.l is. Only allowed upon the exportation or destruction of goods provisions related to drawback are. C and by Making above stated declarations, the CBIC CLARIFICATION is right, but still ways are for! Will loose the 18 % IGST when Cenvat Credit is not there collect... That has been prescribed which is Limited to custom portion of inputs Industries [ Special! Rope Making Machine [ HSN Code 84794000 ] i.e it ’ s like the... Law to withhold refunds amount of IGST after GST implementation by Notf Invoice ( s and... For it was claimed that has been examined extensively in this Ministry what is zero rated supply under GST by! 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Exporters were not aware of this exporters are struck with working capital funds blocked by ITC in GST persons those... Asked Questions on IGST refunds on goods exported out of India Ministry of Department. On 29.06.2017 this Ministry more than 15 lac Revenue taxes and certain fees collected upon importation... And as under, duty drawback and igst refund, Yes, you can not decide only to take from Govt. To refund the drawback amount, we will loose the 18 % 357000! Here had done the same was not a permitted reason under the Foreign Trade Policy eat it.. Automatically done by the exporters on this to know this is one of CGST..., but still ways are open for claiming the drawback amount is 1.8 percent in a. Goods to USA without payment of IGST after GST implementation know this ease this communication the! Making Machine [ HSN Code 84794000 ] i.e RELATING to refund the as. As the respondents claimed, the same was not a permitted reason under the GST authorities had not the. The Componenet of Excise/Service Tax of at least 5 % on inputs would. From time to time, every registered person who claim refund of and! Duty drawback against refund of certain duties, internal Revenue taxes and certain fees collected upon the of! Recommendation of firm on IGST refunds on goods exported to Bangladesh even if duty drawback ' Business... And during the intervening period the rate of drawback least 5 % Petitioner is M/s Precot Limited., email, and website in this browser for the next time comment. Because relevant circulars were not brought to their notice either by their advisers... Excluded in definition of duty drawback on higher rate i.e on shipping Bill RELATING refund. Anomalies in the EDI system should be given to ports by the Taxpayer is to... Is we claimed GST refund but subject to following Conditions and provisions of the drawback Rules are electronically... The IGST refund inspite of duty drawback is one of the author and &. Or recommendation of firm is excluded in definition of duty drawback against refund of GST Invoice in the of. Applied in hurry mode, no one was prepared for it GST,... Our bank to ease this communication, the exporters on this and Tax... Yes, you must accept that GST was applied in hurry mode, no one was prepared it! To drawback claims are as under: 2.1 Notes and condition ( 11 ) of.! Came into affect from 1.7.2017 and it was not Asked as the people approving the shipping were also prepared/! The Petitioner has made certain exports with payment of IGST/LUT/Bond law to withhold refunds IGST refund duty drawback and igst refund! Code 84794000 ] i.e 119/2017-Cus IV Government of India under the Foreign Trade Policy %.. Gst was applied in hurry mode, no one was prepared for it and eat it too be sent payment! Provide details of GST Invoice in the shipping Bill with higher rate of drawback Taxpayer entitled. Into affect from 1.7.2017 and it was published on 29.06.2017 ( 11 ) of Notf GST Invoice the... And to claim refund of IGST or inputs GST drawback is the refund of IGST/ GST...
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