Exporter wins IGST refund case for transitional period exports with 7% interest on Rs. 30 lakh claim

Bombay HC allowed petition for IGST refund on exported goods during transitional period. Court held petitioner entitled to refund of IGST paid after deducting differential duty drawback amount. Respondent authorities directed to grant refund of Rs. 30,04,591 with 7% simple interest from shipping bill date until actual refund. Court found circular dated 09.10.2018 cannot apply retrospectively to exports made in 2017. Refund amount to be released within three weeks of presenting authenticated order copy.

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Issues involved:
The issues involved in this case are the validity of certain provisions of the Notification No. 131/2016-Cus. (N.T.) and Circular No. 37/2018-CUSTOMS, and the entitlement of the Petitioner to a refund of IGST paid on goods exported during the Transitional Period.

Validity of Provisions:
The Petition sought to declare Paragraph 11(d) read with 12A(a)(ii) of the Notification No. 131/2016-Cus. (N.T.) and Circular No. 37/2018-CUSTOMS as ultra vires and unconstitutional. The Court noted that similar issues had been addressed in previous judgments by different Courts. Citing the decisions in various cases, the Court highlighted that in similar circumstances, the Petitioners were allowed refunds of IGST paid on goods exported. The Court found substance in the contentions raised by the Petitioner regarding entitlement to the refund.

Refund of IGST:
The Court examined the memo of the Petition and the reply affidavit of the Respondents. It was observed that the Petitioner was entitled to a refund of IGST paid during the Transitional Period, after deducting the differential amount of duty drawback. The Court noted that no dispute was raised regarding the dis-entitlement of the Petitioner concerning the quantum described in the Shipping Bills, which, under Rule 96 of the CGST Rules, would qualify as refund applications.

Court's Observations:
The Court referred to its previous decisions in similar cases, emphasizing that the Circular on which the Respondents relied could not be applied retrospectively. It was noted that the Petitioner's case involved zero-rated supplies under the IGST Act, making them eligible for a refund. The Court highlighted that the Petitioner had not availed a higher duty drawback, which would have led to double benefits, and thus, the refund of IGST was justified.

Judgment and Relief:
In light of the above discussions, the Court allowed the Petition and directed the Respondents to refund the IGST paid by the Petitioner on the zero-rated supplies under the Shipping Bills. The Court ordered the refund of a specific amount along with interest as per the IGST Act. The Petition was allowed in terms of the relief sought regarding the refund of IGST paid during the Transitional Period. The Court directed the release of the amount within a specified timeframe with simple interest to the Petitioner.

Conclusion:
The Court disposed of the case, emphasizing that the refund should be processed by the respective authorities where the Shipping Bills were filed. No costs were awarded in this matter.

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