IGST refund- Rule 96
This query is : Resolved
05 March 2020
Dear Expert,
We are into automobile sector and has procured goods , locally and imported .
We have availed GST credit on the same, also part of import material has come under Advance Licences and EPCG Licences both .
We are exporting our final product with payment of IGST as per rule 96. and getting refund of the same.
Afain,As per Rule 96(10) ,it restrict the importer to take IGST refund if the assesse has availed benefit notification 48/2017 except if assesee has bought goods under EPCG Licences.
Howeever , as we have procured goods both under EPCG and advance licences, if the restriction is applied to us also?
We are into automobile sector and has procured goods , locally and imported .
We have availed GST credit on the same, also part of import material has come under Advance Licences and EPCG Licences both .
We are exporting our final product with payment of IGST as per rule 96. and getting refund of the same.
Afain,As per Rule 96(10) ,it restrict the importer to take IGST refund if the assesse has availed benefit notification 48/2017 except if assesee has bought goods under EPCG Licences.
Howeever , as we have procured goods both under EPCG and advance licences, if the restriction is applied to us also?
05 March 2020
The following link will help you to get clarity on this issue:-
https://www.lakshmisri.com/insights/articles/pre-import-condition-and-rule-96-10-misplaced-comforts-and-gst-implications-for-advance-authorization-holders/#
https://www.lakshmisri.com/insights/articles/pre-import-condition-and-rule-96-10-misplaced-comforts-and-gst-implications-for-advance-authorization-holders/#
10 March 2020
Rule 96(10 ) is not in favour of a genuine exporter, as we have already taken refund of a good amount .
but not we want to shift to Rule 89 after knowing the said rule , can u please guide .
Weather any chances of receiving the notice from department ?
Also when govt. is sanctioning IGST refund, it must be getting scrutinized at department level ?
but not we want to shift to Rule 89 after knowing the said rule , can u please guide .
Weather any chances of receiving the notice from department ?
Also when govt. is sanctioning IGST refund, it must be getting scrutinized at department level ?
28 July 2024
### **IGST Refund and Rule 96 of the CGST Rules**
**Rule 96 of the CGST Rules** pertains to the refund of IGST paid on exports and has been updated and clarified over time to address various concerns related to refund claims. Here’s how it applies in your case and how you might proceed:
### **Understanding Rule 96(10)**
**1. **Rule 96(10) Overview:**
Rule 96(10) restricts the refund of IGST paid on exports if the importer has availed certain benefits, including the benefit under Notification 48/2017-Customs. However, an exception is made for goods procured under EPCG licenses.
- **Notification 48/2017-Customs** provides various exemptions and benefits for imports made under Advance Licenses and EPCG Licenses.
- **EPCG License:** Refunds of IGST are permissible if the goods are procured under an EPCG License.
- **Advance License:** If the goods are procured under an Advance License, the restriction applies unless other provisions are met.
### **Applying Rule 96(10) in Your Case:**
**1. **Goods Procured Under Advance Licenses and EPCG Licenses:**
- **EPCG Licenses:** As per Rule 96(10), you should be eligible for IGST refunds on exports of goods procured under EPCG Licenses despite availing benefits under Notification 48/2017-Customs.
- **Advance Licenses:** For goods procured under Advance Licenses, the restriction on IGST refund generally applies. This means that you might face challenges in claiming IGST refunds on such goods.
**2. **Impact on Your Refund Claims:**
- **Current Refund Claims:** If you have already received refunds for IGST on exports of goods procured under Advance Licenses, you need to review if the claim was correctly processed.
- **Shifting to Rule 89:** You may consider shifting to Rule 89 if Rule 96(10) is restrictive. Rule 89 deals with refunds of unutilized input tax credit (ITC) for zero-rated supplies.
### **Guidance for Shifting to Rule 89:**
**1. **Rule 89 - Refund of Unutilized ITC:**
- **Eligibility:** Rule 89 allows for the refund of unutilized ITC on account of zero-rated supplies (export of goods or services).
- **Procedure:** File the refund claim under Rule 89 and provide necessary details and documentation to support your claim. Ensure all conditions for refund under Rule 89 are met, including compliance with procedural requirements.
**2. **Documentation and Compliance:**
- **Maintain Records:** Ensure that you have accurate records of your transactions, including imports under Advance Licenses and EPCG Licenses.
- **Compliance:** Ensure compliance with all requirements specified in the GST rules and notifications.
### **Risk of Notices from the Department:**
**1. **Department Scrutiny:**
- **Scrutiny:** The GST refund claims are generally subject to scrutiny by the GST authorities. The department may review the refund claims, especially if there are discrepancies or if benefits have been availed under different schemes.
- **Notice:** If there is a concern or discrepancy, the department might issue a notice seeking clarification or additional information. Ensure that all claims are supported by accurate and complete documentation.
**2. **Pre-emptive Actions:**
- **Review:** Conduct a self-review of your refund claims and the compliance with Rule 96(10).
- **Consultation:** Consult with a GST consultant or tax advisor to ensure that your refund claims are processed correctly and in accordance with the applicable rules.
### **Conclusion:**
1. **Rule 96(10) Restriction:** As you have procured goods under both EPCG and Advance Licenses, the restriction on IGST refund due to the Advance License benefit applies, but you should be eligible for refunds on goods procured under EPCG Licenses.
2. **Shifting to Rule 89:** If Rule 96(10) is restrictive, consider shifting to Rule 89 for claiming refunds of unutilized ITC on zero-rated supplies.
3. **Department Scrutiny:** Refund claims are subject to scrutiny, and you should ensure compliance with all requirements to avoid issues.
4. **Consultation:** Consult with a GST expert to navigate these complexities and ensure proper compliance.
By following these steps, you can manage your IGST refund claims effectively and address any concerns regarding compliance and scrutiny.
**Rule 96 of the CGST Rules** pertains to the refund of IGST paid on exports and has been updated and clarified over time to address various concerns related to refund claims. Here’s how it applies in your case and how you might proceed:
### **Understanding Rule 96(10)**
**1. **Rule 96(10) Overview:**
Rule 96(10) restricts the refund of IGST paid on exports if the importer has availed certain benefits, including the benefit under Notification 48/2017-Customs. However, an exception is made for goods procured under EPCG licenses.
- **Notification 48/2017-Customs** provides various exemptions and benefits for imports made under Advance Licenses and EPCG Licenses.
- **EPCG License:** Refunds of IGST are permissible if the goods are procured under an EPCG License.
- **Advance License:** If the goods are procured under an Advance License, the restriction applies unless other provisions are met.
### **Applying Rule 96(10) in Your Case:**
**1. **Goods Procured Under Advance Licenses and EPCG Licenses:**
- **EPCG Licenses:** As per Rule 96(10), you should be eligible for IGST refunds on exports of goods procured under EPCG Licenses despite availing benefits under Notification 48/2017-Customs.
- **Advance Licenses:** For goods procured under Advance Licenses, the restriction on IGST refund generally applies. This means that you might face challenges in claiming IGST refunds on such goods.
**2. **Impact on Your Refund Claims:**
- **Current Refund Claims:** If you have already received refunds for IGST on exports of goods procured under Advance Licenses, you need to review if the claim was correctly processed.
- **Shifting to Rule 89:** You may consider shifting to Rule 89 if Rule 96(10) is restrictive. Rule 89 deals with refunds of unutilized input tax credit (ITC) for zero-rated supplies.
### **Guidance for Shifting to Rule 89:**
**1. **Rule 89 - Refund of Unutilized ITC:**
- **Eligibility:** Rule 89 allows for the refund of unutilized ITC on account of zero-rated supplies (export of goods or services).
- **Procedure:** File the refund claim under Rule 89 and provide necessary details and documentation to support your claim. Ensure all conditions for refund under Rule 89 are met, including compliance with procedural requirements.
**2. **Documentation and Compliance:**
- **Maintain Records:** Ensure that you have accurate records of your transactions, including imports under Advance Licenses and EPCG Licenses.
- **Compliance:** Ensure compliance with all requirements specified in the GST rules and notifications.
### **Risk of Notices from the Department:**
**1. **Department Scrutiny:**
- **Scrutiny:** The GST refund claims are generally subject to scrutiny by the GST authorities. The department may review the refund claims, especially if there are discrepancies or if benefits have been availed under different schemes.
- **Notice:** If there is a concern or discrepancy, the department might issue a notice seeking clarification or additional information. Ensure that all claims are supported by accurate and complete documentation.
**2. **Pre-emptive Actions:**
- **Review:** Conduct a self-review of your refund claims and the compliance with Rule 96(10).
- **Consultation:** Consult with a GST consultant or tax advisor to ensure that your refund claims are processed correctly and in accordance with the applicable rules.
### **Conclusion:**
1. **Rule 96(10) Restriction:** As you have procured goods under both EPCG and Advance Licenses, the restriction on IGST refund due to the Advance License benefit applies, but you should be eligible for refunds on goods procured under EPCG Licenses.
2. **Shifting to Rule 89:** If Rule 96(10) is restrictive, consider shifting to Rule 89 for claiming refunds of unutilized ITC on zero-rated supplies.
3. **Department Scrutiny:** Refund claims are subject to scrutiny, and you should ensure compliance with all requirements to avoid issues.
4. **Consultation:** Consult with a GST expert to navigate these complexities and ensure proper compliance.
By following these steps, you can manage your IGST refund claims effectively and address any concerns regarding compliance and scrutiny.
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