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

Neelam Pharma Ltd received an IGST refund on export of goods. Sale proceeds of ₹50 lakh were not realised within the FEMA period. The refund was ₹9 lakh. The RBI, on merits, writes off the requirement of realisation of the sale proceeds. Which is correct under Rule 96B?

The refund of ₹9 lakh is not recovered. The proviso to Rule 96B(1) says that if the Reserve Bank of India writes off the requirement of realisation of sale proceeds on merits, the refund already paid to the applicant shall not be recovered.

  1. ARefund of ₹9 lakh is recovered with interest, as non-realisation is not excused
  2. BRefund of ₹9 lakh is not recovered, because of the RBI write-off on meritsCorrect
  3. CHalf of the refund is recovered since write-off is only partial relief
  4. DRefund is recovered only if Neelam fails to deposit within fifteen days

Explanation

The proviso to Rule 96B(1) states that where the RBI writes off the requirement of realisation on merits, the refund paid shall not be recovered. So no recovery applies despite non-realisation. The recovery option ignores the proviso, and no half-recovery mechanism exists.

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