Refund on account of supply to EOU

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Dipesh (Querist)
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20 September 2021 Hi Expert,

We have got order from EOU unit, & we have to claim refund of GST vide notification 48/2017-Central Tax dated 18.10.2017, but in same transaction we are going to import duty free goods under advance authorisation. so can we claim dual benefits of GST refund and duty drawback import under advance authorisation.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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21 September 2021 Dual benefit not allowed.
The third proviso to sub-section (3) of section 54 of the CGST Act states that no refund of input tax credit shall be allowed in cases where the supplier of goods or services or both avails of drawback in respect of central tax.

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Udaya Chandran

Udaya Chandran (Expert)
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21 September 2021 Please note the purpose of refund is to compensate the supplier when he has to pay tax on his inward supplies and he has not to pay tax on outward supplies. In that case, he is struck in paying tax for his supplies which is exempted. In your case, since you're not going to pay any tax, how can you claim refund of the same. Only if you pay taxes on imported supplies, then only you can claim refund of the same, provided your supplies are eligible under the Act.

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