Refund application of itc accumulated due to export to nepal

Yes, refund of accumulated ITC on exports to Nepal is available, but with specific conditions since Nepal is a special case. Here is the full picture:

1. Nepal/Bhutan — Special Treatment:
- Exports to Nepal and Bhutan are treated as zero-rated supplies under GST (even though they are land borders and payments are often in INR)
- IGST Act treats Nepal and Bhutan as 'deemed foreign territory' for the purpose of export — supplies are zero-rated
- RBI permits INR settlement for Nepal/Bhutan trade — so INR realisation from Nepal qualifies for zero-rated status

2. Refund Route:
- Option 1: Export under LUT (without payment of IGST) and claim refund of accumulated ITC under Rule 89(4)
- Option 2: Export with payment of IGST and claim refund of IGST paid (more straightforward for Nepal trade since many exporters don't have LUT filed)

3. Procedure for ITC Refund (RFD-01):
- File LUT in Form RFD-11 annually on GST portal (if not already filed)
- File GST RFD-01 → Select 'Refund of ITC on account of zero-rated supplies without payment of tax'
- Upload Statement 3A (for goods) or 3B (for services)
- Supporting documents: Export invoices, shipping bill / ARE-1 form (for Nepal land exports), Bank Realisation Certificate (BRC) in INR from your bank confirming Nepal payment, LUT copy

4. Nepal-Specific Document: For Nepal exports, instead of a shipping bill, the export evidence is the ARE-1 form or customs-endorsed invoice — ensure you have this document as proof of export

5. Time Limit: File refund within 2 years from the relevant date (date of export)

6. GSTN Validation: The GST portal cross-checks export data with ICEGATE — for Nepal land border exports, ensure data is correctly filed in GSTR-1 under zero-rated supplies

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Rushabh gala

Aashok Kumar Sharma

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