GST Refund under LUT without payment of GST

Hey Dinesh! Here’s the scoop on your GST refund question for pharma exports under LUT:

GST Refund on Exports under LUT without Payment of GST

• When you export medicines (or any goods) under Letter of Undertaking (LUT), you do not pay IGST on exports.

• You are allowed to claim refund of the unutilized Input Tax Credit (ITC) accumulated on inputs, input services, and capital goods used in the export.

• So, even though you export without paying GST (thanks to LUT), you can claim a refund of the accumulated ITC.

• This refund is separate from Duty Drawback, which is a different incentive.

Key Points:

• You cannot claim refund of IGST because you didn’t pay IGST (export under LUT means zero IGST payment).

• You can claim refund of unutilized ITC accumulated on inputs/input services.

• You must file the refund application in Form GST RFD-01 within the prescribed time.

• You need to maintain proper documents supporting your exports, LUT, and ITC details.

So yes, you are eligible to apply for GST refund on unutilized ITC even if you export under LUT and get Duty Drawback.

If you export under LUT without paying GST, you are normally eligible to claim a refund of unutilized Input Tax Credit (ITC) on your inputs.

However, if you have already claimed Duty Drawback for the same inputs including GST portion, then you cannot claim GST refund again (no dual benefit allowed under Section 54 of CGST Act).

If your Duty Drawback is only for customs duties (and not GST), you can still claim GST refund for unutilized ITC.

In short:

• Duty drawback on customs duty only → GST refund allowed.

• Duty drawback includes GST portion → GST refund not allowed.