The Authority for Advance Ruling (AAR) of Chhattisgarh ruled that the exporter is eligible for recovery of unused Input Tax Credit (ITC) of Goods and Services Tax (GST) under Reverse Charge Mechanism on transportation costs to the Goods Transportation Agency.
The applicant registered as an exporter under GST Act and engaged in exporting molasses to Bangladesh under Letter of Undertaking (LUT) without payment of GST.
Further, they purchased the same from the registered tax payers of Haryana and Punjab after payment of 0.1% GST on the goods.
The applicant said that, aside from describing the types of activities they are involved in, they have not provided any other legal analysis or factual clarification of the issues under consideration for the requested judgement in the ARA01 filed.
The personal hearing was done by the representative of the applicant Alok Chandra Das, Senior Accountant and also submitted the sample copies of the shipping bills, invoice cum packing list.
The bench highlighted section 54 of Central Goods and Service Tax Act, 2017 read with section 16(3)(a) of the Integrated Goods and Services Tax Act, 2017 prescribing the claim of refund of any unutilized Input Tax Credit (ITC) at the end of any tax period.
The authority further emphasised that the CGST Act, 2017’s section 2(106) specifies “tax period” as the time period for which a return must be filed. Thus, after completing GSTR-1 and GSTR-3B monthly returns, an exporter may request a refund of any ITC that was not used.
The bench of Sonal K. Mishra and Rajesh Kumar Singh held that the applicant is eligible for a refund of unused input tax credits of such GST paid under transportation charges paid under Reverse Charge on transportation charges paid to a GTA in India for the export purpose and GST paid on other ancillary services for the export purpose from registered service providers of India. This decision was made in light of section 54 of the CGST act read with section 16(3)(a) of the IGST act.
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