We are exporting goods on payment of IGST and subsequently claiming a refund of the IGST paid on such exports.

Recently, one of our export customers has raised debit notes amounting to ₹62.00 lakhs towards warranty claims. No material has been returned by the customer against these debit notes. The customer has adjusted the debit note amount against our outstanding export invoices, and accordingly, we have received the reduced payment. The export invoices have been duly knocked off with the bank, and we have obtained the corresponding BRC.

In this situation, we would like to understand the GST and export benefit implications:

  1. Since the customer has deducted ₹62.00 lakhs towards warranty claims and we have received the balance amount, are we required to reverse/pay back any export benefits already availed in respect of the full export invoice value?
  2. Are we required to pay GST @ 18% on the ₹62.00 lakhs short payment/debit note amount, considering that the goods have not been returned and the debit note is towards a warranty claim?
  3. If the same export had been made under LUT without payment of IGST, would the GST treatment be different? Specifically, would we be required to pay GST @ 18% on the ₹62.00 lakhs warranty claim/debit note amount in that case?
  4. Are there any FEMA/RBI, GST, DGFT or export-realisation implications arising from the short realization, despite the export invoice being settled/knocked off with the bank and BRC having been obtained?

We would appreciate an expert opinion on the above, preferably with reference to the relevant provisions/circulars/notifications, as this involves a significant amount of ₹62.00 lakhs.

Thanks in advance.