Analysing export benefits under GST

Virtual Webinar

19 April 2024 | 3:00 PM

Under the GST law, the exporters have the option of either exporting the goods on payment of IGST or exporting the goods without payment of IGST under Letter of Undertaking (LUT) in terms of Section 16 of the IGST Act. Further, wherever the goods are proposed to be exported on payment of IGST, the exporters can utilize the eligible input tax credit available with them for payment of IGST and subsequently claim refund of the same in terms of Rule 96 of the CGST Rules. However, sub-rule (10) of Rule 96 of the CGST Rules specifically bars an exporter to export the goods “on payment of IGST” (and consequently claim refund) in case benefit of certain notifications (such as Notification No. 48/2017-CT dated 18.10.2017, Notification No. 40/2017-CT (Rate) dated 23.10.2017, Notification No. 78/2017-Customs, or 79/2017-Customs both dated 13.10.2017) has been availed.

Further, GST law allows exporter to export without payment of tax under LUT and claim refund of input tax credit (ITC) under Section 54 of the CGST Act. Rule 89 of the CGST Act specifies the formula and procedure for refund. Further Rule 89(4A) provides for refund of ITC in case exporter has availed benefit of Notification No. 48/2017- Central Tax and Rule 89(4B) provides for refund of ITC in case benefit under any other notifications as specified above have been taken.

Considering the above, doubts have been expressed about the true scope of Rule 89(4A)/ 89(4B). It is understood that the Customs/GST department has also initiated investigation/enquiry in order to check the compliance by exporters and to find out whether there is any violation of the said Rules. It is further understood that in case of violation, the department is taking strict action for recovery of the refund amount along with interest/penalty and also proposing to stop the future export consignments of exporters. Apart from this, the above Rules have also been a subject matter of challenge before various High Courts.

Keeping in mind the above, LKS is pleased to organize a webinar specially for export sector to provide insights into the implications of the above Rules both under GST and Customs law.

The webinar would inter alia cover:

  • Background of Section 54 read with Rule 89/89(4A)/89(4B) & Rule 96
  • Challenges faced by the industry in claiming refund under Rule 96(10)
  • Whether Rule 89(4A)/89(4B) or Rule 89(4) is optional
  • Determination of quantum of refund under Rule 89(4A)/89(4B) (including judgement in Filatex India Ltd.
  • Surrender of GST refund, if required, would be after taking into account the refund otherwise available or not
  • Availability of Input Tax Credit of IGST paid through TR-6 challan
  • Past and current disputes – Interest & penalty

The panel of speakers will be led by:
Mr. V. Sridharan
Co- Founder, LKS and Senior Advocate, Bombay High Court