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IGST refund allowed despite wrong HSN code when duty drawback rates identical for both codes The Bombay HC allowed a petition for IGST refund on zero-rated supplies. The petitioner had mistakenly mentioned HSN Code 3907-A instead of 3907-B in ...
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Provisions expressly mentioned in the judgment/order text.
IGST refund allowed despite wrong HSN code when duty drawback rates identical for both codes
The Bombay HC allowed a petition for IGST refund on zero-rated supplies. The petitioner had mistakenly mentioned HSN Code 3907-A instead of 3907-B in shipping bills, but both codes carried identical duty drawback rates. The customs authority rejected the refund claim citing a circular requiring forfeiture of refund rights when claiming higher duty drawback. The HC held the circular was inapplicable as it was issued after the export dates and concerned higher duty drawback scenarios, not identical rates or clerical errors. The court directed refund of Rs. 17,04,127 with interest, noting no double benefit was claimed.
Issues involved: The issue involves a petition under Article 226 of the Constitution of India seeking a refund claim on account of zero-rated supplies under the IGST Act.
Summary: 1. The petitioner, engaged in manufacturing Polyester Resin, exported consignments in 2017 with a mistake in the HSN Code mentioned in the shipping bills. 2. The petitioner claimed a refund of IGST for the exports treated as zero-rated supply, but the refund was denied based on Circular No. 37 of 2018. 3. The petitioner sought permission to rectify the HSN Code error, but no response was received from the authorities. 4. The petitioner argued that the duty drawback rates for the incorrect and correct HSN Codes were the same, and the error was admitted by the Custom House Agent (CHA). 5. The respondents contended that the petitioner had consciously availed a higher rate of duty drawback, as per the circular, relinquishing the right to claim the refund. 6. The High Court found that the duty drawback rates were the same for both HSN Codes and that the circular could not be applied retrospectively. 7. Relying on previous decisions, the court allowed the petition, directing the respondents to refund the IGST amount with interest to the petitioner.
Conclusion: The High Court of Bombay allowed the petition, directing the respondents to refund the IGST amount of Rs. 17,04,127 to the petitioner for zero-rated supplies, along with interest as per the IGST Act, within two weeks of receiving the court order.
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