Recently, the Department has started disputing quantum of Input Stage GST refund available on export goods on the ground that value of export goods should be lower of FOB value declared on Shipping Bill or value declared on GST invoice. The department is relying on Internal Circular issued pursuant to CAG’s observations and is planning to issue Show Cause Notice to taxpayers for recovering refund granted in past.

Despite this restriction not stemming from GST law, department’s step is likely to have huge implications. Further, the Department may use this logic to deny Output Stage GST refund and Inverted Tax refund as well. 

To throw light upon correct legal position and way forward for handling future matters, Mr. Deepak Suneja, Partner at NITYA Tax Associates has coherently discussed issue and NITYA’s take in short video titled ‘Analysis of Departmental Instructions curtailing Input Stage GST refund to FOB value of export goods’ available below:

Hope you find this an interesting watch. Please feel free to share your comments / feedback on the same.

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