Refund of ITC on Export of service

Import / Export 423 views 3 replies

Dipjyoti Majumdar

CA in service & CS. dipmaj@

3492 Points Posted on 06 November 2022

Dear Experts

The tax payer exports service under LUT. It had one export invoice raised in January 2021 which was paid by the foreign buyer in May 2021.

While processing the refund application for unutilised ITC for FY 2020-21, the gst officer did not consider this under zero rated service as the money came after FY 2020-21.

While processing the application for unutilised ITC for FY 2021-22, the gst offficer does not want to consider this under zero rated service as the export invoice is related to FY 2020-21.

Will the exporter loose benefit of this export invoice raised in FY 2020-21 and paid in FY 2021-22 for computation of refund of ITC as per section 54 read with rule 89 ?

Regards

Replies (3)

Dipjyoti Majumdar

CA in service & CS. dipmaj@

3492 Points Posted on 06 November 2022

Just to add the formula for refund calculation is :

Zero rated supply of service X ITC / Adjusted total turnover

Zero rated supply of service , in short, is the amount received for export invoices.....

Dipjyoti Majumdar

CA in service & CS. dipmaj@

3492 Points Posted on 23 November 2022

Dear Experts

Any thoughts on this please ...

Regards,

CA. ANKIT PANDYA

682 Points Posted on 23 November 2022

It should get considered in next year's refund (i.e. FY 2021-22) calculations as per rule 89(4)D as extracted under :-

"Zero-rated supply of services is the aggregate of the 'payments received during the relevant period for zero-rated supply of services' and zero-rated supply of services where supply has been completed for which payment had been received in advance in any period prior to the relevant period reduced by advances received for zero-rated supply of services for which the supply of services has not been completed during the relevant period"

Plain reading of the rule suggests calculations:

1. as all receipts during the relevant period (irrelevant to year of sale) + Advance of Current year Supply received in prior period - Adv received in current year for pending supplies