Total Amount to be Claimed as Refund on Export of Goods or Services

Rule 89(4) stipulates that on account of export of goods or services or both without pay of tax under security/LUT as per the arrangements of section 16(3) of the IGST Act, 2017, refund of ITC will be conceded according to the accompanying equation:

where,-

I. “Refund sum” signifies the most refund that is acceptable;

II. “Net ITC” signifies ITC profited on inputs and input services during the pertinent period other than the ITC benefited for which refund is guaranteed under sub-rules (4A) or (4B) [given below] or both;

III. “Turnover of zero-rated supply of goods” signifies the estimation of zero-rated supply of products made during the significant period without pay of tax under security/LUT, other than the turnover of provisions in regard of which refund is guaranteed under sub-rules (4A) or (4B) or both’

IV. “Turnover of zero-rated supply of services” signifies the estimation of zero-rated supply of services made without pay of tax under bond or LUT, determined in the accompanying way, to be specific:-

Zero-rated supply of services is the total of the payments got during the applicable period for zero-rated supply of services and zero-rated  supply of services where supply has been finished for which pay had been received ahead of time in any period before the significant period diminished by advances got for zero-rated supply of services for which the supply of services has not been finished during the pertinent period.

V. “Adjusted Total turnover” signifies the entirety of the estimation of:

i. the turnover in a State or a Union territory, as characterized under section 2(112), barring turnover of services; and

ii. the turnover of zero-rated supply of services decided as far as proviso (D) above and non-zero-appraised supply of services,

excluding

i. the estimation of exempt supplies other than zero-rated supplies; and

ii. the turnover of provisions in regard of which refund is asserted under sub-rule (4A) or sub-rule (4B) or both, assuming any,

during the significant period

“Relevant period” signifies the period for which the claim has been

Rule 89(4A) stipulates that on account of provisions received on which the provider has profited the advantage of considered exports under Notification No. 48/2017 CT dated 18.10.2017, refund of ITC, benefited in regard of different inputs/input services utilized in making zero-rated supply of goods or services or both, will be allowed.

Rule 89(4B) stipulates that where the individual asserting refund of unutilised ITC because of zero rated supplies without pay of tax has –

  • Got supplies on which the provider has profited the advantage of Notification Nos. 41/2017 IT(R) or 40/2017 CT(R) both dated 10.2017, or
  • profited the advantage of Notification 78/2017 Cus. or on the other hand 79/2017 Cus. both dated 13.10.2017,

the refund of ITC, profited in regard of inputs received under the said notices for export of goods and the input tax credit benefited in regard of different data sources or input services to the extent utilized in making such export of goods, will be allowed.

Rule 89(5) of the CGST Rules, 2017 stipulates that on account of refund because of inverted duty structure, refund of ITC will be allowed according to the accompanying equation –

where,-

I. “Net ITC” signifies ITC profited on inputs during the important period other than the ITC benefited for which refund is asserted under sub-rules (4A) or (4B) or both; and

II. “Adjusted Total turnover” has a similar meaning as allocated in sub-rule (4)

Enquire with Certicom Consulting in case of any queries.

 

Required Conditions to Claim Input Tax Credit

The enrolled individual will be qualified for ITC on a supply in particular if ALL the accompanying four conditions are satisfied:

1. Ownership of tax paying document [Section 16(2)(a) read with rule 36 of the CGST Rules]

ITC can be benefited based on any of the accompanying documents:

I) Invoice given by a provider of goods or services benefits

ii) Invoice gave by beneficiary (getting goods and services benefits from unregistered provider) alongside confirmation of payment of tax (in case of reverse charge)

iii)A debit note given by provider

iv) Bill of entry or comparative document given under Customs Act

v) Revised invoice

vi) Document given by Input Service Distributor

The docs premise which ITC is being taken ought to contain at least the accompanying details:

  • Measure of tax charged
  • Details of goods or services
  • All estimation of stock of goods as well as services
  • GSTIN of the provider and beneficiary
  • Place of supply if there should arise an occurrence of inter state supply

No ITC of tax paid towards requests including fraud[Rule 36(3)]: Tax paid in compatibility of any order where any request has been affirmed by virtue of any fraud, willful error or concealment of facts can’t be benefited as ITC

2. Receipt of the goods and/or services [Section 16(2)(b)]

The enrolled individual taking the ITC must have received the goods and/or services.

“Bill to Ship to” Model even included: Under this model, the products are delivered to a third party on the direction of the client (enlisted individual) who buys the goods from the seller (provider) i.e., the customer (enrolled individual) who buys such products doesn’t get the said products.

In any case, in such a situation, section 16(2)(b) considers that the enlisted individual (customer) has received the products. As it were, delivery of products to someone else on the direction of the enrolled individual by method for transfer of docs of title to goods or generally either before or during the movement of goods, is regarded to be the receipt of products by the enlisted individual. Along these lines, ITC will be accessible to the enrolled individual on whose request the products are delivered to a third individual.

Example– A will be a dealer who submits an order on B for a consignment of soda ash. A gets a purchasing request from C for a similar amount of soda ash. A educates B to deliver the goods to C, and thus he raises an invoice on C. In spite of the fact that the products are not physically received at the premises of A, section 16(2)(b) permits ITC of the goods to A.

3. Tax leviable on supply really paid to Government [Section 16(2)(c)]

Tax ought to really have been paid, with money or through use of ITC, on the goods and/or services for which ITC is being taken.

4. Filing of return [Section 16(2)(d)]

The enrolled individual taking the ITC probably filed his return under section 39.

Enquire with Certicom Consulting in case of any further queries.

Time Restriction for Availing ITC (Detailed Blog)

ITC on invoices relating to a financial year or debit notes identifying with invoices relating to a financial year can be profited any time till the due date of filing of the return for the month of September of the succeeding financial year or the date of filing of the significant yearly return, whichever is prior.

It might be noticed that the return for the month of September is to be filed by twentieth October and yearly return of a financial year is to be filed by 31st December of the succeeding financial year.

In this way, the upper time limit for taking ITC is twentieth October of the following financial year or the date of filing of yearly return, whichever is prior. The basic reason for this limitation is that no adjustment consequently is allowed after September of next financial year. In case that yearly return is filed before the month of September, at that point no change can be made after filing of yearly return.

Special case

The time restriction u/s 16(4) doesn’t make a difference to claim for re-benefiting of credit that had been reversed before.

Example – Hercules Machinery delivered a machine to ABC in January 2019 under Invoice no. 49 dated 28th January, 2019 for Rs. 4,15,000 plus GST, and attempted preliminary runs and adjustment of the machine according to the requirements of ABC. The total amount chargeable for the post-delivery activities was covered in a debit note brought up in April 2019 for Rs. 50,000 plus GST. ABC didn’t file its yearly return till October, 2019.

In spite of the fact that the debit note was received in the following financial year, it identifies with a invoice received in the financial year ending March 2019. Hence, the time limit for taking ITC accessible on Rs. 50,000 just as on Rs. 4,15,000 is 20th October, 2019; prior of the date of filing the yearly return for 2018-19 or the return for September 2019.

Enquire with Certicom Consulting in case of any queries.