“Export of Goods,” as defined in the IGST Act, 2017, involves moving goods out of India. A ruling by the Allahabad High Court clarified that this constitutes an export. Such transactions are zero-rated under GST. Refunds can be claimed either by supplying goods without IGST payment under a bond or by paying IGST and claiming a refund. Realization of sale proceeds wasn’t mandatory until October 1, 2023, for refund claims.

Navigating Export Refund Procedures

Amendment and Application

An amendment effective October 1, 2023, requires depositing refunded amounts if sale proceeds are not realized within the specified period. Legal interpretations suggest that until this date, the rule lacked statutory backing and couldn’t override substantive law. Consequently, realization of proceeds became necessary only after October 1, 2023, for refund claims.

Legal Interpretation

Until October 1, 2023, Rule 96B (1) lacked legal authority to override the GST Act. Precedents, including Supreme Court rulings, suggest that rules cannot supersede substantive law. Thus, Rule 96B (1) was invalid until October 1, 2023. Realizing proceeds became necessary only from this date for exporters to claim refunds. This amendment doesn’t affect refund claims for exports made before October 1, 2023, without realized proceeds within FEMA timelines.

Procedural Considerations

Despite procedural lapses, exporters can still claim refunds of IGST paid on exports or utilized ITC. Tribunals have upheld this principle, emphasizing that substantial benefits of exports should not be denied due to minor procedural issues.

Export Refund Procedures – Conclusion

The export of goods under the IGST Act, 2017 allows for zero-rated supplies and refund claims. While the requirement for realizing sale proceeds for refunds became mandatory from October 1, 2023, legal interpretations suggest this rule lacked statutory backing until then.

Despite procedural conditions, exporters can still claim refunds of IGST paid on exports or utilized ITC, emphasizing that substantial benefits of exports should not be denied due to minor procedural lapses.

Navigate export and refund procedures with ease with Pitchers Global expert consulting services, and it also helps you properly claim refunds while you think of optimizing your export operations.