2023 (11) TMI 952 - HC - GST

Customs authorities must process IGST refund claims for exports during GST transition period with 7% interest

Intec Export India Private Limited Versus Union Of India & Ors.

The Delhi HC directed customs authorities to process the petitioner's IGST refund claim for goods exported during the GST transition period (01.07.2017 to ... Refund of IGST - entitlement of refund while claiming duty drawback - goods exported out of India during the transition period after the rollout of the GST Regime (from 01.07.2017 to 30.09.2017) - Constitutional validity of Paragraph 11(d) read with 12A(a)(ii) of the Notes and Conditions of Notification No. 131/2016-Cus. (N.T.), dated 31.10.2016 (as amended by Notification No. 59/2017-Cus. (NT) dated 29.06.2017 and Notification No. 73/2017-Cus.(NT) dated 26.07.2017) - constitutional validity of Circular No.37/2018-Customs dated 09.10.2018. HELD THAT:- Reliance placed in the case of M/S AMIT COTTON INDUSTRIES THROUGH PARTNER, VELJIBHAI VIRJIBHAI RANIPA VERSUS PRINCIPAL COMMISSIONER OF CUSTOMS [2019 (7) TMI 472 - GUJARAT HIGH COURT] where it was held that respondents are directed to immediately sanction the refund of the IGST paid in regard to the goods exported, i.e. 'zero rated supplies', with 7% simple interest from the date of the shipping bills till the date of actual refund. The respondents are directed to process the petitioner’s claim for refund along with applicable interest in accordance with law in light of the aforesaid decision - petition disposed off. Issues involved:The denial of refund of Integrated Goods and Service Tax (IGST) paid by the petitioner on goods exported during the transition period after the rollout of the GST Regime is challenged based on certain impugned notifications and circulars.Summary:Issue 1 - Challenge to Notifications and Circular:The petitioner sought a declaration that specific paragraphs of the impugned notifications and circular are ultra vires Section 16 of the IGST Act, 2017, and unconstitutional, thereby requesting the quashing of the same. The notifications and circular in question prescribed different rates of duty drawback for specified goods, with higher rates covering various indirect taxes. Exporters claiming duty drawback at higher rates were denied IGST refunds. The petitioner, a merchant exporter, was denied IGST refund as it claimed duty drawback at higher rates specified in Column 'A'.Issue 2 - Identical Drawback Rates:In cases where the drawback rates in columns 'A' and 'B' were identical, it was established that only the customs duty component was neutralized, not other indirect taxes. This was crucial in determining whether exporters were eligible for IGST refunds.Issue 3 - Precedents and Court Decisions:The judgment referenced previous court decisions, including the TMA International Pvt. Ltd. case and the Awadkrupa Plastomech Pvt. Ltd. case, where exporters with identical drawback rates were granted IGST refunds. The Gujarat High Court's decision in M/s Amit Cotton Industries v. Principal Commissioner of Customs was also cited, emphasizing the entitlement to IGST refunds for zero-rated supplies.Conclusion:Given the precedents and decisions cited, the court directed the authorities to process the petitioner's refund claim for IGST paid on exported goods during the transitional period, deducting any differential duty drawback amounts if necessary. The concerned officer was tasked with verifying duty drawback availed by the petitioner and making adjustments as required. The petition was disposed of accordingly, with the petitioner's claim to be processed along with applicable interest in line with the court's directives and relevant legal provisions.