Dear Sir
Clarification regarding GST RULE 96(10)
we are manufacturer exporter of goods and also merchant exporter
for manufacturing goods we procure raw materials at normal gst rate ,manufacture and export goods on payment of IGST, we receive refunds by filing gstr3b.
for traded goods we procure goods at GST 0.1% concessional rate (NOTIFICATION 40 & 41 OF CGST RULES). we export goods on LUT withoutpayment of IGST.
is it violation of rule 96(10) . kindly advise
Rule 96(10) of the CGST Rules, 2017, restricts the exporters who have availed the benefit of certain notifications from claiming refunds of IGST paid on exports.
Specifically, it affects those who procure inputs at concessional rates or without paying taxes.
Applicability to Your Situation As a manufacturer exporter and merchant exporter, your situation involves two different scenarios: -
*Manufactured Goods*: You procure raw materials at normal GST rates, manufacture goods, and export them on payment of IGST.
You receive refunds by filing GSTR-3B. - *Traded Goods*: You procure goods at a concessional GST rate of 0.1% under Notifications 40 and 41 of the CGST Rules and export them on Letter of Undertaking (LUT) without payment of IGST. Potential Conflict with Rule 96(10) The key issue is whether exporting goods procured at a concessional rate of 0.1% GST without payment of IGST on LUT violates Rule 96(10).
According to recent circulars and clarifications, there have been discussions on regularizing refunds of IGST availed in contravention of Rule 96(10) for exporters who imported inputs without payment of integrated taxes and compensation cess.
- *Review Notifications and Circulars*: Stay updated with the latest notifications and circulars regarding GST and exports. -
*LUT and Concessional Rates*: Verify that exporting goods on LUT without IGST payment after procuring them at concessional rates aligns with GST regulations.
By taking these steps, you can better understand the implications of Rule 96(10) on your export activities and ensure compliance with GST laws.
Gupta Sachdeva & Co. Chartered Accountants
New Delhi
CA Final
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Naveen Fintech Pvt Ltd
Kolkata
CA Inter
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