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

Himalaya Engineering Ltd exported goods and received a refund of integrated tax paid on the export. The sale proceeds were not realised in India within the period allowed under FEMA, including extensions, and that period expired on 20 June. RBI has not written off the realisation requirement. What must Himalaya do under Rule 96B(1)?

Himalaya must deposit the refunded amount, limited to the extent sale proceeds were not realised, along with applicable interest within thirty days of the expiry of the FEMA period or extended period. Failing that, the amount is recovered as an erroneous refund with section 50 interest.

  1. ADeposit the entire refund with interest within thirty days of 20 June, regardless of any partial realisation
  2. BDeposit the refund to the extent of non-realisation, with applicable interest, within thirty days of 20 JuneCorrect
  3. CDeposit the refund to the extent of non-realisation, with interest, within fifteen days of 20 June
  4. DWait for a demand notice and pay only if the officer issues one, with no interest

Explanation

Rule 96B(1) requires deposit of the refunded amount to the extent of non-realisation, with applicable interest, within thirty days of expiry of the FEMA period or extended period. If the person fails, recovery follows under the demand provisions along with section 50 interest. The full-refund option ignores the words 'to the extent of non-realisation'.

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