GST REFUND WHEN SALES MADE AT CONCESSIONAL RATE

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Supplier selling at 0.10% GST to merchant exporter while inputs taxed at 12%/18% can claim refund of accumulated ITC under inverted duty structure. Refund allowed u/s 54(3) subject to export within 90 days and required proof.

Hemkumar

Hemkumar

(Querist)
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17 February 2026 I have supplied goods to merchant exporter by charging GST at the rate of 0.10% while I have procured material by paying GST at full rate 12% and 18%, whether I can claim GST refund of GST credit ?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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17 February 2026 Yes, you can claim a refund of the unutilized input tax credit (ITC) on GST paid at 12% and 18% when supplying goods to a merchant exporter at the concessional 0.10% IGST rate, as this creates an inverted duty structure.

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Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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17 February 2026 Suppliers to merchant exporters qualify for refunds under Section 54(3) of the CGST Act due to accumulated ITC from higher input rates versus the low output tax.
This is supported by CBIC Circular No. 37/11/2018-GST, confirming eligibility for inverted tax structure refunds.
Conditions include the merchant exporter exporting within 90 days and providing proof like shipping bill with your GSTIN.

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