GST Refund if Export made through merchant exporters

By | December 5, 2017
(Last Updated On: December 5, 2017)

What happens to accumulated credit with manufacturers exporting through merchant exporters? Inputs are @18% GST, sale to Merchant exporter @0.1%.

Answer: Manufacturers can claim refund of accumulated ITC under section 54(3) of CGST Act read with Rule 89 of CGST Rules.

Section 54 (3) of CGST Act 2017 :  Subject to the provisions of Section 54(10), a registered person may claim refund of any unutilised input tax credit at the end of any tax period:

Provided that no refund of unutilised input tax credit shall be allowed in cases other than—

(i) zero-rated supplies made without payment of tax;

(ii) where the credit has accumulated on account of rate of tax on inputs being higher than the rate of tax on output supplies (other than nil rated or fully exempt supplies), except supplies of goods or services or both as may be notified by the Government on the recommendations of the Council:

Provided further that no refund of unutilised input tax credit shall be allowed in cases where the goods exported out of India are subjected to export duty:

Provided also that no refund of input tax credit shall be allowed, if the supplier of goods or services or both avails of drawback in respect of central tax or claims refund of the integrated tax paid on such supplies.


Rule 89 of CGST rules : Application for refund of tax, interest, penalty, fees or any other amount :Any person may file an application electronically in FORM GST RFD-01 through the common portal, either directly or through a Facilitation Centre notified by the Commissioner:

However any claim for refund relating to balance in the electronic cash ledger may be made through the return furnished for the relevant tax period in FORM GSTR-3 or FORM GSTR-4 or FORM GSTR-7, as the case may be:

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