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CMA Final · Indirect Tax Laws and Practice · GST Refunds - Inverted Duty Structure and Zero Rated Supplies

Rohini Exports Pvt Ltd exported goods without payment of tax under LUT. The FOB value in the shipping bill is Rs 48,00,000 and the value in the tax invoice is Rs 50,00,000. For the refund formula under rule 89(4), what value of goods exported out of India is taken, ignoring the 1.5 times cap?

Rs 48,00,000 is taken. The value of exported goods for the refund formula is the lower of the FOB value declared in the shipping bill and the value in the tax invoice or bill of supply, and the FOB value is lower here.

  1. ARs 50,00,000, the invoice value, being higher
  2. BRs 49,00,000, the average of the two
  3. CRs 48,00,000, the FOB value, being lowerCorrect
  4. DRs 2,00,000, the difference

Explanation

The Explanation to rule 89(4) takes the value of goods exported as the FOB value declared in the shipping bill or the value declared in the tax invoice or bill of supply, whichever is less. Here Rs 48,00,000 is less than Rs 50,00,000. Using the invoice value is the key mistake because it is the higher figure.

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