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

Narmada Auto Parts received a refund of Rs 12,00,000 of integrated tax on export of goods. Sale proceeds were not realised within the FEMA period, and Rs 12,00,000 was recovered from Narmada under Rule 96B(1). Later the buyer paid the sale proceeds in full, within the extended period permitted by the RBI. Narmada produced evidence of realisation 2 months after the date of realisation. What is the position?

The proper officer refunds the full Rs 12,00,000. Rule 96B(2) allows return of 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. Both conditions are satisfied here.

  1. AThe proper officer refunds the recovered Rs 12,00,000, as evidence was produced within three months of realisation and realisation was within the RBI-permitted periodCorrect
  2. BNo refund is available because recovery under Rule 96B(1) is final
  3. COnly half the amount is refunded because evidence was produced after one month
  4. DRefund is available only if the RBI had written off the realisation requirement

Explanation

Rule 96B(2) requires evidence within three months from the date of realisation, and realisation within the extended period permitted by the RBI. Both conditions are met, so the recovered amount is refunded to the extent of realisation, here in full. The write-off proviso in sub-rule (1) is a separate situation that prevents recovery in the first place, so option D is wrong.

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