Client Challenge
A service-exporting company applied for a refund of IGST paid on exports. During review, the GST officer raised doubts about whether ITC from capital goods could be used to pay IGST, potentially putting the refund at risk.
The Problem
Though the tax was correctly paid:- The officer questioned the ITC eligibility on capital goods
- There was a risk of refund denial based on this interpretation
- Client followed procedures, but faced delay and uncertainty
Our Approach
We backed our case with detailed legal reasoning and government guidance:- Cited Section 54 of the CGST Act on the refund of zero-rated supplies
- Highlighted Rule 89 and Rule 96(9), which contain no restriction on using capital goods credit
- Referred to CBIC Circulars 37/2018 and 59/2018, which request details of ITC on capital goods as well, clearly showing that capital goods are within the scope of ITC.
The Result
- The officer accepted our submission
- Refund processed without litigation or delays
- Client gained renewed confidence in credit utilisation practices