return of samples, Goods and Services Tax - GST

[Arryie Arryie]

I import samples to take orders locally. Then I return them to foreign buyer. I receive 70-80 SKU's of samples every 6 months and I return 70-80 sku's every month. How do I get the refund of my IGST paid during import since I did not sell these samples locally.

Posts / Replies

[Shilpi Jain]

Can you not utilise the IGST paid? Is it becoming excess credit.

Hope the BCD you are claiming drawback.

[Arryie Arryie]

Thanks Shilpi for your response.

*Correction in the original message - "Then I return them to foreign seller"

I have excess IGST reflecting but I do not trade goods at all. All my income from this foreign seller and other are a form of consultancy fee. So I don't know what to do with the excess IGST. Can I take refund in cash or can I transfer it to some other party who can use it in knocking off and pay me.

On BCD I have to do some more research on how to take the refund. Appreciate any information on this front before I start my research.

[KASTURI SETHI]

Why have you not claimed drawback so far ? 

What is the period involved ?

Can you  further elaborate your query ? 

[KASTURI SETHI]

What is the mode of return of samples to the foreign seller  ?

[Arryie Arryie]

Thanks Mr. Kasturi Sethi for responding.

The first set of import of samples were done in June 2024. I haven't made any return of samples till now and I am about to do so in the month of April 2025.

[KASTURI SETHI]

SECTION 74. Drawback allowable on re-export of duty-paid goods. — (1) When any goods capable of being easily identified which have been imported into India and upon which [any duty has been paid on importation, -

(i) are entered for export and the proper officer makes an order permitting clearance and loading of the goods for exportation under section 51; or

(ii) are to be exported as baggage and the owner of such baggage, for the purpose of clearing it, makes a declaration of its contents to the proper officer under section 77 (which declaration shall be deemed to be an entry for export for the purposes of this section) and such officer makes an order permitting clearance of the goods for exportation; or

(iii) are entered for export by post under [clause (a) of section 84] and the proper officer makes an order permitting clearance of the goods for exportation,

ninety-eight per cent of such duty shall, except as otherwise hereinafter provided, be re-paid as drawback, if -]

(a) the goods are identified to the satisfaction of the [Assistant Commissioner of Customs or Deputy Commissioner of Customs] as the goods which were imported; and

(b) the goods are entered for export within two years from the date of payment of duty on the importation thereof :

Provided that in any particular case the aforesaid period of two years may, on sufficient cause being shown, be extended by the Board by such further period as it may deem fit.

(2) Notwithstanding anything contained in sub-section (1), the rate of drawback in the case of goods which have been used after the importation thereof shall be such as the Central Government, having regard to the duration of use, depreciation in value and other relevant circumstances, may, by notification in the Official Gazette, fix.

[(3) The Central Government may make rules for the purpose of carrying out the provisions of this section and, in particular, such rules may —

(a) provide for the manner in which the identity of goods imported in different consignments which are ordinarily stored together in bulk, may be established;

(b) specify the goods which shall be deemed to be not capable of being easily identified; and

(c) provide for the manner and the time within which a claim for payment of drawback is to be filed.]

(4) For the purposes of this section -

(a) goods shall be deemed to have been entered for export on the date with reference to which the rate of duty is calculated under section 16;

(b) in the case of goods assessed to duty provisionally under section 18, the date of payment of the provisional duty shall be deemed to be the date of payment of duty.

[KASTURI SETHI]

Duty drawback is allowed  in respect of Customs duty, IGST, GST Compensation Cess, Education cess and SAHE Cess paid while importing the goods.

[Shilpi Jain]

Suggested to take professional help to set an SOP for the transaction to ensure proper compliance and to avail the benefits due under the law.