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

Bharat Gems Ltd exported goods and received a refund of integrated tax paid on export. Export sale proceeds of ₹40 lakh were due, but ₹10 lakh remains unrealised after the FEMA period including extension expired. The RBI has not written off the requirement. Under Rule 96B, what must Bharat Gems do?

Bharat Gems must deposit the refund only to the extent of the unrealised sale proceeds, along with interest, within thirty days of expiry of the FEMA period or extended period. Failing this, the amount is recovered as an erroneous refund with section 50 interest.

  1. ADeposit the whole refund with interest within thirty days of expiry of the period
  2. BDeposit the refund to the extent of the unrealised sale proceeds, with interest, within thirty days of expiry of the periodCorrect
  3. CNothing, as recovery arises only if no proceeds are realised at all
  4. DDeposit the proportionate refund within fifteen days of expiry of the period

Explanation

Rule 96B(1) covers non-realisation in full or in part. The refund must be deposited to the extent of non-realisation, with applicable interest, within thirty days of expiry of the period. Otherwise it is recovered as an erroneous refund. Depositing the whole refund overstates the amount, since only the unrealised portion (10/40) is covered.

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