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CA Final · Indirect Tax Laws · Import and Export Under GST

Arvind Exports Ltd received an IGST refund of Rs 12,00,000 on an export of goods worth Rs 60,00,000. Sale proceeds of Rs 15,00,000 were not realised within the FEMA period, which expired on 31 January with no RBI write-off. Arvind did not deposit anything and the amount was recovered from it as an erroneous refund. Later, on 10 May, Arvind realised Rs 10,00,000 within an RBI-permitted extended period and produced evidence on 20 June. Assuming the refund is proportionate to the export value, how much is refundable to Arvind under Rule 96B(2)?

Rs 2,00,000 is refundable. The refund rate is 20 percent of export value, so the Rs 10,00,000 realised corresponds to Rs 2,00,000. Evidence was produced within three months of realisation and the realisation fell within the RBI-permitted extended period, satisfying Rule 96B(2).

  1. ARs 2,00,000 refundable by the proper officer, being the refund proportionate to the Rs 10,00,000 realisedCorrect
  2. BRs 3,00,000 refundable, being the recovery on the unrealised Rs 15,00,000
  3. CNil, because evidence was produced after thirty days of realisation
  4. DRs 12,00,000, being the full refund originally paid

Explanation

Refund per rupee of export value is 12,00,000/60,00,000 = 20%. The recovery on the unrealised Rs 15,00,000 was Rs 3,00,000 (before interest). Rule 96B(2) refunds the recovered amount to the extent of realisation if evidence is produced within three months of realisation, and realisation falls within the RBI extended period. Evidence on 20 June is within three months of 10 May, so Rs 10,00,000 x 20% = Rs 2,00,000 is refundable. The thirty-day option wrongly imports the deposit period from sub-rule (1).

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