How refund of ITC amount is calculated in case export is made without payment of tax

Introduction

Under GST regime, the exporter of goods or services can claim the refund in two possible ways which are stated below:

• Refund of Input tax credit without payment of tax
• Refund after payment of tax on exports

In this article, we shall discuss the calculation on how much ITC is eligible to be claimed as refund under the option 1 as stated above.

Refund of ITC in case of export without payment of tax

Where any taxable goods or services are exported without payment of tax, under bond or letter of undertaking, refund of input tax credit shall be granted as per the following formula:

Important point

No refund of input tax credit shall be allowed if the supplier of goods and / or services avails of drawback allowed under the applicable Drawback Rules or claims rebate of tax paid under the Act or the IGST Act, 201_ in respect of such tax. – Applicable in case of import and export

Meaning of important terms

(a) "Net ITC" means input tax credit availed on inputs and input services during the relevant period. Relevant period” means the period for which the claim has been filed.

(b)  "Export turnover of goods" means the value of goods exported during the relevant period without payment of tax under bond or letter of undertaking;

(c) "Export turnover of services" means the value of services exported without payment of tax under bond or letter of undertaking, calculated in the following manner, namely:-

(d) Export turnover of services = payments received during the relevant period for export services + export services whose supply has been completed for which payment had been received in advance in any period prior to the relevant period - advances received for export services for which the supply of service has not been completed during the relevant period.

(e) Relevant period” means the period for which the claim has been filed.

(f) "Adjusted Total turnover" means the value of the aggregate value of all taxable supplies, exempt supplies, exports of goods and / or services made within a State by a taxable person and inter-state supplies of goods and / or services made from the State by the said taxable person excluding taxes, if any charged under the CGST Act, SGST Act and the IGST Act, as the case may be.

Conclusion

If you have any query, you can email the same to info@hubco.in.

Related Links:

• GST Registration
• GST Return Filings
• GST Software

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