Registered individuals under the Central Goods and Services Tax Act, 2017 (CGST Act) can export goods and services by either paying the Integrated Goods and Services Tax (IGST) or using a Bond or Letter of Undertaking (LUT) without paying it. If IGST is paid or if there is unutilized input tax credit (ITC), taxpayers can claim a refund as per Section 54 of the CGST Act. However, Rule 96(10), amended in October 2018, complicated the refund process by barring exporters who received supplies under certain notifications from claiming IGST refunds, leading to recovery actions by tax authorities. To address these issues, the GST Council met on September 9, 2024, and made two key recommendations.
Recent developments on Rules 96(10), 89(4A) & (4B) of the CGST Rules in India
Public
Other countries
Author: Ivana Picajkić
Category:
Fiscal subject related
Views:
3208
Content accuracy validation date:
14.11.2024
Content accuracy validation time:
08:24h
Registered individuals under the Central Goods and Services Tax Act, 2017 (CGST Act) can export goods and services either by paying the Integrated Goods and Services Tax (IGST) or without paying it using a Bond or Letter of Undertaking (LUT). If IGST is paid on exports, or if there is unutilized input tax credit (ITC) from exports made under a Bond or LUT, taxpayers can claim a refund according to Section 54 of the CGST Act and related rules.
However, Rule 96(10) of the CGST Rules, which was amended in October 2018, complicated matters. It stated that exporters who had received supplies benefiting from certain specified notifications could not claim refunds on IGST paid for exported goods. This rule effectively barred many exporters from receiving refunds, similar to an e-commerce site denying refunds for discounted purchases.
As a result, many exporters faced challenges when trying to claim IGST refunds, leading to recovery actions by tax authorities for alleged violations of Rule 96(10).
To address these issues, the GST Council met on September 9, 2024, and made two key recommendations:
- For Past Cases: Exporters can regulate their situation by paying back the IGST and compensation cess (tax) they received under specified notifications, along with interest. This allows them to claim their IGST refunds without being penalized for past violations,
- For Future Cases: The Council recommended removing Rule 96(10) and related rules (89(4A) and (4B)) entirely, simplifying the refund process for exporters.
Following these recommendations, the Ministry of Finance issued a notice on September 10, 2024, confirming that exporters could regularize their claims by paying the necessary amounts. On October 8, 2024, the government officially removed Rules 96(10), 89(4A), and (4B).
These changes are seen as a significant relief for Indian exporters, streamlining the refund process and promoting easier business operations and exports.
Other news from Other countries
South Africa: Real-Time E-Invoicing Framework Set for 2028 Rollout
Public
Other countries
Author: Ljubica Blagojević
Other countries
Author: Ljubica Blagojević
The South African Revenue Service (SARS) is advancing its VAT Modernization program, which aims to introduce structured e-invoicing and near real-time invoice data reporting to replace periodic VAT filings. The system will enable ERP-based invoice transmission and AI-driven cross-checks to improve compliance and reduce the estimated R800 billion tax gap. Development and consultations are planned f... Read more
Qatar's General Tax Authority (GTA) Warning on Fraud
Public
Other countries
Author: Ema Stamenković
Other countries
Author: Ema Stamenković
GTA warns taxpayers about fraudulent emails and texts impersonating them, urging verification through official channels and reporting scams. The GTA issued a press release warning taxpayers about fraudulent emails and text messages impersonating the Authority. These messages contain suspicious links claiming tax refunds or requesting personal information updates. The GTA confirmed these communica... Read more
UAE: Electronic Invoicing Version 1.0 Guide Published
Public
Other countries
Author: Ema Stamenković
Other countries
Author: Ema Stamenković
UAE Ministry of Finance published electronic invoicing guidelines for phased rollout starting July 2026. The UAE Electronic Invoicing Guidelines Version 1.0 have been published by the UAE Ministry of Finance. The document lays out the primary technological and regulatory framework to assist companies in getting ready for the nationwide rollout of electronic invoicing, which will begin in phases on... Read more
The UAE E-Invoicing Guidelines
Public
Other countries
Author: Ema Stamenković
Other countries
Author: Ema Stamenković
The UAE e-invoicing model involves a decentralized, Peppol-based framework for in-scope transactions, including B2B, B2G, G2B, and G2G, while excluding B2C. Suppliers must appoint one ASP for e-invoices, maintaining compliance responsibility. Onboarding involves understanding requirements, selecting an ASP, and testing exchanges. Six invoice categories exist, with specified regulations for special... Read more
South Africa’s VAT Modernization: The Roadmap to Mandatory E-Invoicing
Public
Other countries
Author: Ljubica Blagojević
Other countries
Author: Ljubica Blagojević
South Africa’s VAT Modernisation program plans a phased move to mandatory e-invoicing and near real-time VAT reporting, supported by SARS strategy documents and reinforced through 2026 stakeholder consultations. While not yet mandated, SARS is preparing structured invoice data reporting to strengthen compliance, reduce fraud, and enable automated monitoring. The model will require businesses to tr... Read more
UAE E-Invoicing Compliance: Complete 2026 Guide
Public
Other countries
Author: Ema Stamenković
Other countries
Author: Ema Stamenković
The UAE is implementing mandatory e-invoicing by 2026-2027, following Ministerial Decisions No. 244 and No. 243 of 2025. Companies must be ready to receive electronic invoices, designate Accredited Service Providers (ASP), and use the PINT-AE format via the Peppol network, governed by a decentralized model. With a rollout scheduled for 2026 and 2027, the UAE is headed toward mandatory e-invoicing... Read more
New VAT Deemed Supplier Rules for Electronic Marketplaces in Saudi Arabia from Jan 2026
Public
Other countries
Author: Ema Stamenković
Other countries
Author: Ema Stamenković
The guidance outlines when VAT responsibility shifts to electronic marketplaces, impacting reporting and operations. Deemed supplier status applies to non-resident electronic services and resident non-registered suppliers. Obligations include VAT invoicing and returns. Key exceptions exist, but operational involvement influences VAT responsibilities, especially for food delivery and accommodation... Read more