GST REFUND ON EXPORT EXPENSES OF EXEMPTED GOODS

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This discussion clarifies whether rice traders exporting exempted goods can claim an Input Tax Credit (ITC) GST refund for expenses incurred to complete exports. The consensus is yes, provided the exports are zero-rated supplies, even if the goods themselves are exempt. Guidance is provided on filing the refund claim using RFD-01, with recommendations for monthly or quarterly submissions depending on turnover and return filing frequency, while stressing the importance of up-to-date GST returns.

Sunil Patnaik

Sunil Patnaik (Querist)
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30 November 2024 Hello Sir/Madam,
One of my client is rice traders who engaging in domestic sale of exempted & taxable goods and exporting rice (exempted goods) also. Whether he can apply for ITC GST Refund through RFD-01 for the expenses which incurred for make the export complete. Please suggest..

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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01 December 2024 As per section 16(2) of the IGST Act, credit of input tax may be availed for making zero rated supplies, notwithstanding that such supply is an exempt supply.

And As per Circular 45/19/2018 :

Registered person making zero rated supply for Exempted goods shall be eligible to claim refund of Unutilized Input when he either makes supply of goods or services or both under bond or LUT or makes such supply on payment of integrated tax.

You can claim refund by filing RFD 01 online on portal.

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Sunil Patnaik

Sunil Patnaik (Querist)
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02 December 2024 Thank you Sir for your valuable opinion,
Should i file RFD 01 of all the invoice in once a year or monthly/quarterly basis ?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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02 December 2024 You should file Form RFD-01 monthly for refund claims related to zero-rated supplies and inverted duty structures. However, if your turnover is less than Rs. 1.5 crore and you've opted to file quarterly returns, you can file RFD-01 quarterly instead of monthly.
If the amount is not significant or you don't mind waiting until the end of the year, annual filings can be more convenient, requiring less administrative effort. Ensure that all your GST returns are up-to-date (GSTR-1, GSTR-3B) before filing RFD-01, as any non-compliance could delay or even reject the refund claim.

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Sunil Patnaik

Sunil Patnaik (Querist)
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02 December 2024 Thank You Sir for your valuable guidance.

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Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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02 December 2024 You are welcome.

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