Is ITC-04 Filing mandatory for Refund of ITC on exports ?

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This query is : Resolved

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Merchant exporters registered in J&K are seeking clarification on whether filing ITC-04 is mandatory for claiming refunds on zero-rated exports. Despite paying IGST on raw materials and having all export documents in their name, local tax authorities are withholding their GST refunds, citing non-compliance with ITC-04. The exporter argues they are traders, not principal manufacturers, and have previously received refunds without this requirement, with current demands being oral rather than official.

Fayaz Ganie

Fayaz Ganie (Querist)

22 January 2021 We are merchant exporters with registered office in J&K. we get our goods manufactured in different states in our own label and then exporting directly from the premises of manufacturer . we purchase raw materials locally ( near the site of manufacturing ) and get it delivered at the premises of manufacturer and in the process pay 18% IGST . Shipping bills & all export related documents are in our name . Since the goods we export are zero rated (HSN 230990 ) , we claim refund of ITC paid on input materials . Local Tax authorities are withholding our GST for two years now , primary reason cited is that we have to file ITC-04 . Now i want to understand that as per law , are merchant exporters (traders) supposed to file ITC-04? and if yes , is it mandatory for refund of ITC on exports ? Please note that we have already listed the GST Bills issued by the registered manufacturers ( for Job work ) under purchases in our monthly 3B filings

Lekhraj sood

Lekhraj sood (Expert)

22 January 2021 So the manufacturers are your job workers. So as a principal manufacturer you have to file ITC04. The refund should not be withheld for this non-compliance but yes the department may insist on its filing.To avoid litigation and get your money you should file ITC04 (if I have understood the facts correctly).Otherwise clarify the facts.

Fayaz Ganie

Fayaz Ganie (Querist)

23 January 2021 Mr Lekhraj Sood Thank you for your reply . My queries are :
1. We are not registered manufacturers . We don't own any manufacturing site in our name & are not DIC registered . we are traders (Merchant exporters ) , and as for as i understand "Principal Manufacturers "are supposed to file ITC-04, as we are not manufacturers should we still file ITC-04?
2. We filed in writing that if local Tax department feels we should file ITC-04 ,they should issue us an order in writing towards the same but they haven't officially directed us nor issued any clarification or guidance to us .
3. Earlier two refunds were issued without any sort of insistence on ITC-04 by the same department ,they are insisting now on the same but orally .
what is your advise ?
Thank you in advance for your support .

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