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TMI BlogRefund of cess in case of exports on payment of IGSTX X X X Extracts X X X X X X X X Extracts X X X X ..... Refund of cess in case of exports on payment of IGST X X X X Extracts X X X X X X X X Extracts X X X X ..... Cess got accumulated. Exports are made on payment of IGST. Refund of IGST is claimed from customs. Can refund claim be filed for refund of accumulated cess, in proportion to exports? Reply By RaamSrinivasan Kalpathi: The Reply: Please refer to the discussion wherein your question has been beautifully delineated by experts in query no.119531. Reply By Rajagopalan Ranganathan: The Reply: Sir, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Since cess not leviable on the exported goods and you are exporting the goods on payment of IGST, you cannot claim. The accumulated cess is to be allowed to lapse, Reply By KASTURI SETHI: The Reply: (i) In this situation, export on payment of IGST is a hurdle in getting refund claim of accumulated compensation cess. (ii) The department should be concerned with the actual export of goods as per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the parameters laid down in the definition of 'Export' as per Section 2 (5) of IGST Act and 'zero rated supply' as per Section 16 of IGST Act for the purpose of sanctioning refund claim of accumulated compensation cess. (iii) It is well settled law that a circular cannot override Rules & Notifications and Rules & Notifications cannot override the Act. (iv) So if any rule or circ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ular or notification is not in consonance with an Act that need to be either amended or withdrawn in the interest of fair justice to the exporter. (v) If compensation cess is not leviable on the final product, the taxpayer/exporter should not suffer without his fault. Export is always in the interest of economy of India and, in turn, for the welfare of our country. Reply By haribabu koduri: The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Reply: There is no reason for differentiating between exports under LUT or on payment of duty, for refund of cess accumulated on account of exports. Cess gets accumulated since input is liable for cess, but not output. If the tax payer exports part of the output, he should be granted refund of cess in proportionate to exports. Not allowing refund in case of exports on payment of IGST, is agains ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the basic principle of "NOT TO EXPORT TAXES". As usual, we have to litigate the matter and approach higher forums, since the department has rejected the refund claims stating that - refund of cess is permissible only in case of exports under LUT, but not in case of export exports on payment o IGST Reply By KASTURI SETHI: The Reply: Yes. I agree with you. The issue is worth contesti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng. Reply By Shilpi Jain: The Reply: If you have done an export with payment of tax you can take the credit though you will not be eligible for refund. Also, the law has provided certain conditions and procedures to follow to be eligible for refund. So in case you wish to challenge that, note that it will not be an easy battle. Legislature is given the latitude to put it s conditions and restri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctions.
Atleast for future exports consider doing them under LUT to encash cess credits. X X X X Extracts X X X X X X X X Extracts X X X X
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