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IGST refund not applicable where higher DBK was claimed

No. CLE-HO/POL/CIRCULAR/18-19
Sept. 18, 2018

Members of the Council

Sub: Cases where IGST refunds have not been granted due to claiming higher rate of drawback OR where higher rate and lower rate were identical -reg

Dear Member

The Central Board of Indirect Taxes and Customs (CBIC) has issued a Customs Circular No. 37/2018 dated 9th October 2018 on the above subject. This Customs Circular states the following.

·        When composite drawback rate was claimed (by declaring suffix A or C with Drawback serial number) during the period 1.7.17 to 30.7.17, exporter was required to tick DBK002 and DBK003 declarations in the shipping bills. In fact, for period 1.7.2017 to 26.7.2017, a manual declaration was also required to be given as the changes made on 26.7.2017 were made applicable for exports made from 1.7.2017 onwards.

·        By declaring drawback serial number suffixed with A or C and by making above stated declarations, the exporters consciously relinquished their IGST/ITC claims.

·        It has been noted that 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, it has been decided that it would not be justified allowing exporters to avail IGST refund after initially claiming the benefit of higher drawback. There is no justification for re-opening the issue at this stage.

Members may kindly note the above.

With regards

R. Selvam
Executive Director