Hi everyone,
I am the owner of a company and we provide software development services. 95% of our total revenue is generated from the export of services whereas 5% is from domestic business. For one category of projects, we have hired a consultancy in India to provide some knowledge-sharing services. In last FY we paid >10 lacs GST on this consultancy's services. Recently, a CA (other than our CA) told us about the refund mechanism. We have LUT for charging 0% IGST on our export invoices. This CA told us that we can claim refund of this 10+ lacs GST we have paid for services which we then used directly for export of our services. But, our CA is vehemently opposing this as he feels that this will create issues in future (enquiry might be raised 2-3 yrs later) - as it has happened with some of his other clients.
I've read about it online and the GST refund process seems to be straightforward if correct document are furnished. Only issue is that we will not claim refund for the GST that we have paid. Only for the amount which we paid to our consultant - since that was in direct correlation to our export.
My question is:
1. Based on others' experience, is it okay if we claim for a refund?
2. Based on others' experience, what sort of issues may we have to face later, even if all our documentation was correct?
3. Since we DO have some domestic business, will have to explicitly prove that the consultation service we took were only for export of services and not for Domestic sales?
I trust both CAs but since they both are saying opposing things, I am really confused as to how to proceed. Since it is a big amount, I do not want to let go of it. But I also do not want face any issue in the future due to this.
Thank you in advance for answering my 3 questions along with any other general advice. I really appreciate this community as it has helped me in the past with a lot of my questions - coming from a non-accounting background it is of GREAT HELP.
CAclubindia
