Refund of Integrated taxes shall not be granted where the exporters have claimed higher rates of drawback
Central Board of Indirect Taxes & Customs(CBIC) has issued Circular No. 37/2018-Customs dated 9th October, 2018 to clarify that IGST refund on export of goods shall not be granted where the benefit of higher drawback rates has been claimed by the exporters.
Key points of the Circular are:
- All Industry Rates of Drawback had been notified by the virtue of Notification which prescribed that the higher rates and caps of drawback shall not be applicable for export of a commodity or product if such commodity or product is exported claiming refund of the IGST.
- Also, the exporter of commodity or product claiming higher rates of drawbacks should submit a declaration that no refund of IGST paid on exported product shall be claimed.
- By making the aforesaid declarations, the exporters consciously relinquished their IGST/ITC claims. Many exporters had availed the option to take drawback at higher rate in place of IGST refund out of their own volition. Considering the fact that exporters have made aforesaid declaration while claiming the higher rate of drawback, the Government has clarified that it would not be justified allowing exporters to avail IGST refund after initially claiming the benefit of higher drawback.