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CHEMEXCIL
Basic Chemicals, Cosmetics & Dyes Export Promotion Council
(Set-up by Ministry of Commerce and Industry, Govt of India)
Jhansi Castle 4th Fl., 7 Cooperage Road, Mumbai - 400 001.India.
Tel : +91 22 22021288 / * Fax : +91 22 22026684 *
E-mail : info@chemexcil.gov.in Web : https://chemexcil.in
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EPC/LIC/GST_ITC_REFUND |
11th July 2017 |
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TO ALL MEMBERS OF COUNCIL
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ITC Refund Calculation Formula for Exports
against LUT/ Bond as per CGST Rules
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Dear Members,
As you are aware, export of goods and/or services are to be treated as “zero rated supplies” and a person making Zero Rated Supply can opt for either of the following options as per Section 16(3) IGST:
a) Supply of goods or services or both under bond or LUT without payment of IGST and claim refund of unutilized ITC
b) Supply of goods or services or both on payment of IGST and claim refund of such tax paid on goods & services or both supplies
In our view the Export under Bond/LUT will be preferred by the Exporters.
Kindly note that ITC Refund as per CGST Rules are available in Chapter X and it’s important to understand the formula which will be used in calculation of refund for export shipments.
For the sake of your convenience , we reproduce the text from the CGST Rules 2017(Chapter X) as under-
(4) In the case of zero-rated supply of goods or services or both without payment of tax under bond or letter of undertaking in accordance with the provisions of sub-section (3) of section 16 of the Integrated Goods and Services Tax Act, 2017 (13 of 2017), refund of input tax credit shall be granted as per the following formula –
Refund Amount = (Turnover of zero-rated supply of goods + Turnover of zero-rated supply of services) x Net ITC ÷ Adjusted Total Turnover
Where,-
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"Refund amount" means the maximum refund that is admissible;
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"Net ITC" means input tax credit availed on inputs and input services during the relevant period;
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"Turnover of zero-rated supply of goods" means the value of zero-rated supply of goods made during the relevant period without payment of tax under bond or letter of undertaking;
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"Turnover of zero-rated supply of services" means the value of zero-rated supply of services made without payment of tax under bond or letter of undertaking, calculated in the following manner, namely:- Zero-rated supply of services is the aggregate of the payments received during the relevant period for zero-rated supply of services and zero-rated supply of services where supply has been completed for which payment had been received in advance in any period prior to the relevant period reduced by advances received for zero-rated supply of services for which the supply of services has not been completed during the relevant period;
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"Adjusted Total turnover" means the turnover in a State or a Union territory, as defined under subsection (112) of section 2, excluding the value of exempt supplies other than zero-rated supplies, during the relevant period;
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“Relevant period” means the period for which the claim has been filed
Members are requested to please take note of the above methodology for calculation of ITC refund for exports against LUT/ Bond. For full text of CGST Rules, 2017 (as amended up-to 01/07/2017), please use below link-
http://www.cbec.gov.in/resources//htdocs-cbec/gst/cgst-rules-01july2017%20.pdf
For any comments/feed-back on ITC refund formula, members may revert to us on deepak.gupta@chemexcil.gov.in and balani.lic@chemexcil.gov.in .
Thanking you,
Yours faithfully,
S.G BHARADI
EXECUTIVE DIRECTOR
CHEMEXCIL
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