GST Circular No 233/2024
The circular addresses the regularization of Integrated Goods and Services Tax (IGST) refunds for exporters who imported inputs without paying IGST and compensation cess, in contravention of Rule 96(10) of the Central Goods and Services Tax (CGST) Rules, 2017. Rule 96(10) prohibits the refund of IGST on exports if the exporter has availed certain concessional or exemption benefits on imported or domestically procured inputs. Clarification was sought on whether a registered person could regularize their refund after paying the due IGST and cess or expressing willingness to do so.
In response, the Board has emphasized the need for uniform implementation of the law across field formations. It states that exporters who initially availed the benefits under specific Customs notifications but later paid the required IGST and cess, along with any applicable interest, may
regularize their refunds. This clarification is intended to ensure consistency in handling such cases and to provide a clear path for exporters to comply with the legal requirements.
The circular aims to facilitate exporters by allowing them to rectify past discrepancies related to IGST refunds, thus promoting fair practices in line with the CGST Act. Exporters are encouraged to follow the outlined procedures to ensure compliance and obtain the necessary refunds, thereby contributing to a smoother export process and improved tax administration.
test drive services on behalf of manufacturers cannot claim ITC since they do not directly engage in vehicle supply.
The circular further states that if demo vehicles are capitalized, they are considered business assets, allowing for ITC claims as long as they are used for business activities as per Section 16(1) of the CGST Act. The guidelines ensure uniformity in interpreting ITC eligibility for demo vehicles across dealerships, streamlining tax compliance for the motor vehicle sector.
