Clarification on refund of unutilized input tax credit of GST paid on inputs in respect of exporters of fabrics. - GST - States - 11/2017-2018-GST

Government of Goa Department of Commercial Taxes Vikrikar Bhavan, Panaji - Goa - 403001 CCT/26-4/2017-2018/5148 Dated: 7th February, 2018 CIRCULAR (No. 11/2017-2018-GST) Subject: Clarification on refund of unutilized input tax credit of GST paid on inputs in respect of exporters of fabrics - regarding. Doubts have been raised regarding the restrictions of refund of unutilized input tax credit of GST paid on inputs to manufacturer exporters of fabrics [falling under chapters 50 to 55 and 60 and headings 5608, 5801, 5806] under GST. 2.1 The matter has been examined. In this context, sub-section 3 of section 54 of the Goa Goods and Service Tax Act, 2017 (hereinafter referred as Goa GST Act ) provides as under: (3) Subject to the provisions of sub-section (10), a registered person may claim refund of any 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. 2.2 Based on the recommendations of the GST Council, Notification No. 38/1/2017-Fin(R C)(5/2017-Rate) dated 30th June, published in the Extraordinary Official Gazette No. 3 , Series I No. 13 dated 30 th June, 2017 [as amended from time to time] has been issued under clause (ii) of the proviso to sub-section (3) of section 54 of the Goa GST Act, 2017 restricting refund of unutilised input tax credit of GST paid on inputs in respect of certain specified goods, including input tax credit of GST paid on inputs. 2.3 However, the aforesaid notification having been issued under clause (ii) of the proviso to sub-section (3) of section 54 of the Goa GST Act, 2017, restriction on refund of unutilised input tax credit of GST paid on inputs will not be applicable to zero rated supplies, that is (a) exports of goods or services or both; or (b) supply of goods or services or both to a Special Economic Zone developer or a Special Economic Zone unit. 2.4 Accordingly, as regards export of fabrics it is clarified that, subject to the provisions of sub-section (10) of the section 54 of the Goa GST Act, 2017, a manufacturer of such fabrics will be eligible for refund of unutilized input tax credit of GST paid on inputs [other than the input tax credit of GST paid on capital goods] in respect of fabrics manufactured and exported by him. 3. Difficulty. if any, in the implementation of this circular should be brought to the notice of the undersigned. (Dipak M. Bandekar) Commissioner of State Tax Note : Similar circular is Issued under Central Goods and Services Tax Act, 2017 by Tax Research Unit , Dept. of Revenue, Ministry of Finance, GOI vide Circular No. 18/18/2017-GST dated 16th November, 2017.