QUESTION  
 

Your guidance is requested on the following : Merchant Exporters are entitled to receive MEIS duty credit scrips notified by DGFT - Please clarify the rate of GST on transfer of scrip to 3rd parties. If No GST is charged the purchaser do not get ITC can the department recover GST from the seller (transferor) in the event GST is not charged in the bill. Can the department reduce the GST refund due on Purchase Inputs Eligible for ITC.  

ANSWER  
 

Facts of the- case:  GST rate on transfer of scrip to 3rd parties. If No GST is charged the purchaser do not get ITC can the department recover GST from the seller (transferor) in the event GST is not charged in the bill. Can the department reduce the GST refund due on Purchase Inputs Eligible for ITC.  

Law Applicable: Notification No.2/2017-Central Tax (Rate)

Refund of ITC is different thing, it is against zero rated supply as per Section 54 of CGST Act. And Issue of MEIS is different, it  is export incentive given by DGFT under FTP by Ministry of Commerce.

Conclusion: GST is exempt on transfer of MEIS vide Notification No.2/2017-Central Tax (Rate). Transfer of MEIS at Nil rate of GST will not effect refund of ITC under section 54 read with rule 96 A. (Reply dt.31.07.2020)