QUESTION

I raised the following query and got the reply, but i want to add to this QUESTION My query is related to GST refund on Export. In one case the assessee has done an export in the month of June 2018 and October 2018 and invoices were raised as with payment of IGST. However due to some mistake these invoices were treated as without payment of tax under LUT and accordingly GSTR-3B and GSTR-1 were filed. Now the issue is that the Assessee wants to get the refund on export and if we go by the original invoices, we have not paid the IGST through Input in GSTR-3B and are unable to amend the option of without payment of tax in GSTR-1, then how should we proceed to get the refund as per legal provision. To add to this please clarify any legal impediment in getting the refund for the month of June 2018 as the period of 2 years has already expired as of now. Now to add to this query i would like to know that in case we are doing export sales in the month of october 2020 and file the GST returns with payment of tax option utilizing the earlier standing Input Credit, can we take double benefit as utilizing the opening Input standing in the Books and getting the refund of Input on New Purchases simultaneously. Please spare some precious time in resolving these queries as the amount involved is material one. ANSWER Facts of the case: The assessee has done an export in the month of June 2018 and October 2018 and invoices were raised as with payment of IGST. However these invoices were treated as without payment of tax under LUT and accordingly GSTR-3B and GSTR-1 were filed. The period of 2 years has already expired. How to claim refund on export? Law Applicable: SECTION 54 OF CGST ACT (1) Any person claiming refund of any tax and interest, if any, paid on such tax or any other amount paid by him, may make an application before the expiry of two years from the relevant date in such form and manner as may be prescribed. Interpretation: A refund can not be filed because the time limit under Section 54 is closed. Conclusion: Now as per your record balance of ITC is available. You can summarize your case as follows: You exported goods without payment of tax and due to mistake raised invoice with tax but have not claimed any refund against it. If this is the case your balance in ITC account is valid balance and can be used for payment of tax in the future. So the available route is to use this balance in the future. To add to the above query i have discussed this matter with few professionals and department officials and one remedy suggested is to make the necessary amendment in GSTR-9 for the Financial Year 2018-19. In this i can show the export as with payment of tax which has been reported as without payment of tax in GSTR-3B and GSTR-1. Now in case i do this now whether Tax which was to be paid through GSTR-3B by utilizing the ITC is to be paid through DRC-03 by utilizing the credit and Balance Tax to be paid in Cash with Interest for claiming Refund of total IGST. Or i do not file GSTR-9 and adjust standing ITC against future sales. Which option shall i exercise and is in line with law.

ANSWER

If the rate of tax on the goods exported is more than or equal to the rate of tax paid on the inputs and input service then you should export goods on payment of tax. In other words, if the ITC is less than the tax payable on export then you should export on payment of tax.
By doing so, you will slowly consume the ITC which is lying in the balance.  

Now coming to your next question that whether the refund of tax paid on inputs can be claimed simultaneously with refund of tax paid on outward supply of export. The answer is no because the same is not allowed under section 54.

SECTION 54 OF CGST ACT

3) Subject to the provisions of sub-section (10), a registered person may claim refund of any unutilized input tax credit at the end of any tax period:

Provided that no refund of unutilized input tax credit shall be allowed in cases other than''

(i)  zero rated supplies made without payment of tax;

(ii) 'where the credit has accumulated on account of rate of tax on inputs being higher than the rate of tax on output supplies (other than nil rated or fully exempt supplies), except supplies of goods or services or both as may be notified by the Government on the recommendations of the Council:

Provided further that no refund of unutilized input tax credit shall be allowed in cases where the goods exported out of India are subjected to export duty(Reply dt.29.10.2020)