ITC refund on Export without payment of duty

Export without payment of IGST under LUT (Letter of Undertaking) is zero-rated supply, and accumulated ITC can be claimed as a refund. Here is the complete process:

1. Eligibility: Any GST-registered exporter (with valid LUT in Form RFD-11) is eligible to claim refund of unutilised ITC accumulated due to exports.

2. Refund Formula (Rule 89(4)):
Refund Amount = (Turnover of Zero-Rated Supply without tax payment / Adjusted Total Turnover) × Net ITC
Net ITC = Total ITC availed minus ITC reversed during the period

3. Application Process:
- File refund application in Form GST RFD-01 on the GST portal
- Select: Refund Type = 'Refund of ITC on account of export of goods/services without payment of tax'
- Attach: GSTR-2A, export invoices, shipping bills, BRC/FIRC (for service exports), bank realization certificates
- Statement 3A (for goods) or Statement 3B (for services) must be filled in the portal

4. Time Limit: Refund application must be filed within 2 years from the relevant date (date of export as per shipping bill for goods; date of receipt of foreign exchange for services).

5. Processing: Tax officer must process refund within 60 days of complete application. 90% provisional refund within 7 days for exporters meeting certain conditions (IGST already paid cases get faster processing).

6. Common Rejection Reasons: Mismatch between GSTR-1 and shipping bill data; BRC not filed; LUT expired or not filed for the relevant period. Ensure all three match before applying.

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RAJ

Aashok Kumar Sharma

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