2022 (5) TMI 634 - HC - GST

IGST Refund Granted for Exports Despite Drawback Claim Suffix Error; Technical Formality Cannot Bar Valid Refund Entitlement

Gujarat Nippon International Pvt. Ltd. Versus Union of India & Ors.

The HC ruled in favor of the petitioner, directing respondents to sanction IGST refund on exported goods. The court rejected the respondents' argument ... Refund of IGST on goods exported - higher draw back claimed or not - HELD THAT:- From the facts on record, it is evident that the Petitioner is claiming draw back of the custom component only for the goods exported by the Petitioner at the rates specified therein. The rates of draw back under column ‘A’ and ‘B’ for the product exported by the Petitioner is the same. The said fact is not disputed by the Respondents. It is only on technical ground that affixing suffix ‘A’ claim of the Petitioner is denied. Respondents shall sanction the refund towards IGST paid in respect of the goods exported i.e. supply made by shipping. Of course, in case, if there is no other impediment, statutory interest shall follow - Petition allowed. Issues:1. Direction sought for sanctioning refund under IGST Act and CGST Act.2. Interpretation of suffix 'A' in draw back claim.3. Application of circular dated 09.10.2018 on IGST/ITC claims.4. Denial of refund based on suffix 'A' claim for higher draw back.5. Dispute over draw back rates specified under column 'A' and 'B'.6. Claiming draw back of custom component only for exported goods.7. Similarity of the case with the Gujarat High Court judgment.8. Granting of refund and statutory interest.Analysis:1. The Petitioner sought a direction for the sanction of a refund amount under the IGST Act, CGST Act, and relevant rules. The Petitioner claimed that the draw back they had requested was in line with the custom component, despite a suffix 'A' mistakenly included instead of 'B'.2. The Petitioner's counsel argued that the inclusion of suffix 'A' did not indicate a claim for higher draw back, citing a judgment by the Gujarat High Court and its confirmation by the Apex Court. The courts observed that the claim was only for the custom component, and no error was found in the High Court's decision.3. The Respondents contended that the circular from 09.10.2018 implied that by using suffixes 'A' or 'C', exporters waived their IGST/ITC claims. Therefore, they argued that the Petitioner was not entitled to a refund based on this circular.4. The dispute arose from the interpretation of the suffix 'A' in the draw back claim, with the Respondents asserting that it indicated a higher draw back claim, contrary to the Petitioner's position that the rates specified under column 'A' and 'B' were the same.5. The Petitioner exported goods and paid integrated goods and service tax, with differing rates based on credit availed or not availed. However, post an amendment, a single rate was applicable. The Petitioner claimed that the rates specified under column 'A' and 'B' were identical, a fact not disputed by the Respondents.6. It was established that the Petitioner was claiming draw back solely for the custom component of the exported goods at rates specified under both columns 'A' and 'B', which were the same. The Respondents did not contest this fact, and the denial of the claim was based on a technicality regarding the suffix 'A'.7. The Court found in favor of the Petitioner, directing the Respondents to sanction the refund for the IGST paid on the exported goods. The judgment highlighted the similarity of the case with the Gujarat High Court's decision, leading to the grant of the refund and statutory interest.8. Consequently, the writ petition was disposed of with no costs awarded in the matter.