CBIC clarifies IGST Refunds allowed on Exports even after Availing Import Benefits, If IGST and Cess Paid later with Interest [Read Circular]
If inputs initially imported under notification benefits are later paid IGST and compensation cess with interest and reassessed by customs, the IGST refunded on exports will not breach sub-rule (10) of rule 96 of CGST Rules
![CBIC clarifies IGST Refunds allowed on Exports even after Availing Import Benefits, If IGST and Cess Paid later with Interest [Read Circular]](https://www.taxscan.in/wp-content/uploads/2024/09/CBIC-IGST-Refunds-Exports-Availing-Import-Benefits-IGST-Cess-Paid-Interest-taxscan.jpg "CBIC clarifies IGST Refunds allowed on Exports even after Availing Import Benefits, If IGST and Cess Paid later with Interest [Read Circular]")
The Central Board of Indirect Taxes and Customs ( CBIC ) has clarified that exporters may be eligible for Integrated Goods and Services Tax ( IGST ) refunds on exports, even if they initially availed of concessional import benefits under customs notifications, provided that IGST and compensation cess on these inputs are subsequently paid with interest and reassessed by the Jurisdictional...
The Central Board of Indirect Taxes and Customs ( CBIC ) has clarified that exporters may be eligible for Integrated Goods and Services Tax ( IGST ) refunds on exports, even if they initially availed of concessional import benefits under customs notifications, provided that IGST and compensation cess on these inputs are subsequently paid with interest and reassessed by the Jurisdictional Customs Authorities.
Sub-rule (10) of rule 96 of the Central Goods and Services Tax Rules, 2017 ( CGST Rules ) generally bars IGST refunds if import benefits under certain notifications—such as Notification No. 78/2017-Customs and Notification No. 79/2017-Customs—were utilized for the inputs. However, this provision has raised questions about the refund process when IGST and compensation cess are later settled.
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In response to these concerns, the CBIC has issued a clarification through Notification No. 16/2020-CT dated 23.03.2020, which amends sub-rule (10) of rule 96 retrospectively from 23.10.2017. The explanation inserted specifies that the benefits of the notifications will not be deemed to have been availed if the registered person has paid IGST and compensation cess on inputs while only availing exemptions for Basic Customs Duty ( BCD ).
This means that if the inputs were initially imported under the benefits of these notifications but IGST and compensation cess are subsequently paid, along with interest, and the Bill of Entry is reassessed by the customs authorities, then the IGST refunded on exports will not be considered in violation of sub-rule (10) of rule 96 of CGST Rules. Essentially, this allows exporters to claim IGST refunds on exports even if they initially benefited from the import notifications, provided they rectify their tax payments later.
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The circular states as follows: “it is clarified that where the inputs were initially imported without payment of integrated tax and compensation cess by availing benefits under Notification No. 78/2017-Customs dated 13.10.2017 or Notification No. 79/2017-Customs dated 13.10.2017, but subsequently, IGST and compensation cess on such imported inputs are paid at a later date, along with interest, and the Bill of Entry in respect of the import of the said inputs is got reassessed through the jurisdictional Customs authorities to this effect, then the IGST, paid on exports of goods, refunded to the said exporter shall not be considered to be in contravention of provisions of sub-rule (10) of rule 96 of CGST Rules.”
To Read the full text of the Circular CLICK HERE
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