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Treatment of Refund in case of Re-Import

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Nilkesh Parmar

106 Points Posted on 03 April 2020

Hello experts,

In my company, I have exported goods, the same has returned by clients due to defect. Since the same is exported under LUT hence I had claimed refund. Further, I am 100% export oriented unit.
Now my question is whether I have to refund input credit which I had received. Or Refund should be under 18% of Taxable Value or I can adjust refund by the same short claiming in subsequent month ?

Replies (6)

Quick Summary

This discussion addresses the complexities of handling refunds when exported goods are returned due to defects. The original exporter, operating under LUT and as a 100% export-oriented unit, claimed a refund. The core question is whether the input credit received needs to be refunded or if it can be adjusted against subsequent tax liabilities. Experts advise repaying the refund with interest via DRC-03, potentially using Input Tax Credit (ITC), and then re-claiming the ITC in GSTR-3B. It's recommended to inform the tax jurisdiction officer about these actions.

Pankaj Rawat

GST Practitioner

55067 Points Posted on 03 April 2020

You Must reverse the refund claimed with interest of 24% as prescribed in section 50 of CGST Act , & Moreover if any export incentive/benefits being availed need to be surrender

Nilkesh Parmar

106 Points Posted on 10 April 2020

Pankaj sir,

1. Can I repay the refund through DRC-03 by utilising ITC ?

2. Can reavail the ITC on the same through GSTR-3B ?

Pankaj Rawat

GST Practitioner

55067 Points Posted on 16 April 2020

dear

since you have reced. the refund for the same in your bank account & the re-credit of of refund cannot done by issuing order in PMT-03, hence before you reced. any SCN in RFD-08, under section 54, read with section 73 or 74 of cgst act its better you deposit the same in cash ledger with interest & file drc 03 & for re-credit claim itc in your GSTR 3b

note : it will much better if above shall be brought to the knowledge of jurisdiction tax officer