QUESTION

ABC is engaged in the business of making 100% export of services. He is eligible to claim refund of unutilized input tax credit in terms of section 54 (3) of the CGST Act, 2017 and section 16(3) (a) of the IGST Act, 2017. He has two separate registration under GST in the state of Delhi and Haryana. Till September 2019 he was exporting services through Delhi registration only. In October 2019 he shifted his office to Gurgaon, took GST registration for Gurgaon office (didn’t cancel Delhi registration till date) and raised export invoices from Gurgaon registration. He forgot to take separate LUT for Gurgaon registration. Now he wants to file refund of unutilized input tax credit for Gurgaon registration. Can he file refund of unutilized input tax credit for the period from October-19 to March-20 for Gurgaon registration by giving reference of LUT of Delhi office as the PAN of our client is same? Or there is any other alternative to file the refund for the same?

ANSWER

Facts of the case: ABC is engaged in the business of making 100% export of services. He is eligible to claim refund of unutilized ITC in terms of section 54(3) of the CGST Act, 2017 and section 16(3)(a) of the IGST Act, 2017. He has two separate registration under GST in the state of Delhi and Haryana. Till September 2019 he was exporting services through Delhi registration only. In October 2019 he shifted his office to Gurgaon, took GST registration for Gurgaon office (didn’t cancel Delhi registration till date) and raised export invoices from Gurgaon registration but forgot to take separate LUT for Gurgaon registration. Now he wants to file refund of unutilized input tax credit for Gurgaon registration. Can he file refund of unutilized input tax credit for the period from October-19-March-20 for Gurgaon registration by giving reference of LUT of Delhi office as the PAN is same?

Law Applicable: SECTION 54 OF CGST ACT

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

Provided that no refund of unutilised 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 unutilised input tax credit shall be allowed in cases where the goods exported out of India are subjected to export duty:

Provided also that 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.

Reply: Refund of unutilized credit is provided under CGST Act therefore it is a fundamental right of the client.

This benefit is given to the client to make his services competitive in International markets. This cannot be deprived merely for technical and procedural lapses.

The Appellate Authority in case of M/s Rajasthan Spinning & Weaving Mills Ltd. V/S CCE, Jaipur, LL. has condoned the procedural irregularities and has held that the same cannot be adopted for denying substantive benefit.
(Reply dt. 23/03/2021)