0.1% is a merchant export transaction.
Paying 5% on inward supplies makes you eligible against the credit. (subject to notification conditions & S17(5))
Inverted duty structure refunds should be possible. Refer Section 54 & rule 89.
Refund is eligible suggest not to forego the benefit. Obtain a consultant of good standing and experience to enable the same.
Similar concept - taxguru article - https://taxguru.in/goods-and-service-tax/gauhati-hc-ruling-refund-accumulated-itc-case-inverted-duty.H T M L
Expect dispute in this regard.
CAclubindia
