Dear Experts
RTP who is exporter under LUT paid gst under RCM for payment of advance towards future supply of goods to overseas supplier. This RCM payment was not required.
The RCM payment was converted to itc via gstr3B.
Can the exporter claim refund of this itc. Import of goods not yet done and the import will be in FTWZ where there is no gst.
There RTP deals only in export of services till now under LUT. As a result the itc of igst paid under RCM cannot be used generally.
Regards
Given all of the above, my opinion is that you cannot safely claim refund of that particular ITC (GST paid under RCM on advance to overseas supplier of goods) unless you can clearly satisfy the following:
There was a genuine Indian supply to your company (triggering RCM) which was properly taxable under GST (this appears doubtful because the supplier is overseas, place of supply may be outside India, and you say import is to FTWZ).
The GST paid under RCM was properly availed as ITC (i.e., you did not claim blocked ITC).
That GST/ITC relates to inputs or input services used in your export of services business (zero-rated) and you can show that link.
The refund application (Form GST RFD-01) is correctly filed and refund is still within time limit.
You have not already utilised that ITC against output tax.
If any of these links break (especially the first two) then the ITC is likely ineligible and refund is not possible. In particular, paying GST under RCM incorrectly and availing ITC would mean you may have to reverse the ITC rather than make refund.
CAclubindia
