Circular No.ES/236/2017-18 November 27, 2017
To: Members of the Council
Sub: Clarification on refund of unutilized input tax credit of GST paid on inputs in respect of exporters of fabrics
Dear Member,
CBEC has issued Circular No. 18/18/2017-GST dated 16.11.2017 regarding a clarification on refund of unutilized input tax credit of GST paid on inputs in respect of exporters of fabrics.
As you may be aware, vide Notification No. 5/ 2017- Central Tax (Rate) dated 28.06.2017, CBEC had restricted refund of unutilized input tax credit of GST paid on inputs in respect of certain specified goods, including input tax credit of GST paid on inputs under sub-section (3) of section 54.
In this regard, members of Trade had raised doubts regarding the restrictions of refund of unutilized input tax credit of GST paid on inputs to manufacturer exporters of fabrics (falling under chapters 50 to 55 and 60 and headings 5608, 5801, 5806) under GST.
Now, the matter has been examined and CBEC has clarified that subject to the provisions of sub-section (10) of the Section 54 of the CGST Act, 2017, a manufacturer of fabrics will be eligible for refund of unutilized input tax credit of GST paid on inputs [other than the input tax credit of GST paid on capital goods] in respect of fabrics manufactured and exported by him.
Thanking you,
S.BALARAJU
EXECUTIVE DIRECTOR
