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

Ganga Exports obtained a refund of unutilised ITC on export of goods. Sale proceeds were not realised in time and the refund was recovered under Rule 96B(1). Later, the proceeds were realised on 20 July within the extended period permitted by the RBI. Ganga produces evidence of realisation on 15 September. Which statement is correct?

The recovered amount is refunded to the extent of realisation. Rule 96B(2) requires evidence within three months of realisation, and realisation within the RBI-permitted extended period. Both conditions are met here, as evidence came about two months after realisation.

  1. ARecovered amount is refunded to the extent of realisation, as evidence was produced within three months of realisationCorrect
  2. BNo refund of the recovered amount is possible once recovered
  3. CRefund is allowed only if evidence is produced within thirty days of realisation
  4. DRefund is allowed only if the Commissioner extends the FEMA period

Explanation

Rule 96B(2) allows the proper officer to refund the recovered amount to the extent of realisation if evidence is produced within three months of realisation and the proceeds were realised within the period permitted by the RBI. 20 July to 15 September is under three months, and realisation was within the extended period. The no-refund option ignores sub-rule (2).

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