25 May 2020
Dear Experts, please provide a solution to my query.
A firm has imported goods from China and paid Custom Duty and GST at the time of clearance.
The bill send by the supplier was $5.00 per unit(Value = $5*Rs.75/$ = Rs 375 per unit) But at the time of clearance , customs takes the assessable value at Rs. 500 per unit and then charges custom duty and 18% gst. So we paid IGST=500*18% = Rs. 90 (IGST input)
We sold the goods to our customers at Rs. 200 per unit @18% GST (IGST output) = Rs. 36. The rate of tax at the time of import & sale is same @18%
Due to the difference of assessable value under GST & customs, we are having extra input of Rs. (500-200)*18%=IGST Rs. 54.00.
We have sold 1 Lacs unit during the FY 2019-20, outstanding extra credit of IGST = Rs. 54 Lacs.
Query 1 : Whether there is any method by which refund of extra igst paid at the year end can be claimed as refund?
Query 2: Suppose we close down the trading of this product and continue with trading of other remaining products under the same gst registration. Whether the accumulated IGST input of Rs. 54 Lacs can be used against liability of the other products sold?
09 July 2024
Based on the details provided, let's address your queries regarding the IGST input credit and its utilization:
### Query 1: Refund of Extra IGST Paid
1. **Refund Eligibility**: Yes, you can potentially claim a refund of the excess IGST input credit accumulated during the financial year. This excess arises because you paid IGST on a higher assessable value at the time of customs clearance compared to the sale value at which IGST was charged to your customers.
2. **Process**: To claim a refund of the excess IGST paid: - File Form GST RFD-01 (Application for Refund) electronically on the GST portal. - Provide details of the excess IGST paid, including invoices and other supporting documents. - Ensure all necessary conditions for refund eligibility are met, such as filing all GST returns, correctly reflecting excess payment in your returns, etc.
3. **Documentation**: You will need to substantiate your claim with documentation that shows the excess IGST paid, such as customs clearance documents, sales invoices, and calculations demonstrating the difference in assessable values.
4. **Timeframe**: Refunds under GST can take some time to process. It's advisable to monitor the status of your refund application on the GST portal and respond promptly to any queries raised by the authorities.
### Query 2: Utilization of Accumulated IGST Input Credit
1. **Utilization Against Other Products**: Yes, you can utilize the accumulated IGST input credit of Rs. 54 lakhs against the GST liability arising from the sale of other products under the same GST registration.
2. **Adjustment**: The IGST input credit can be used to offset IGST output liability on sales of other products, provided they are also subject to IGST. The rate of tax (18%) matches, which simplifies the adjustment process.
3. **GST Compliance**: Ensure that you maintain proper records of input and output taxes for all transactions. This includes segregating utilization of IGST credit against the appropriate output tax liabilities.
### Conclusion
- **Refund**: Claim a refund of the excess IGST paid by filing GST RFD-01 with supporting documentation. - **Utilization**: Utilize the accumulated IGST input credit of Rs. 54 lakhs against the GST liability on sales of other taxable goods under the same GST registration.
To proceed effectively, it's recommended to consult with a GST practitioner or tax advisor who can assist in preparing and filing the refund application and ensuring compliance with GST regulations.
CAclubindia
