High Court Rules FOB Value in GST Invoice Determines IGST Refund, Overturns Partial Refund Order for Jewellery Exporter.

The HC quashed the Adjudicating Authority's order, which had granted a partial refund of IGST to the petitioner, a jewellery manufacturer, based on the lower value between the export invoice and shipping bill. The HC ruled that the FOB value in the GST Invoice should determine the refund amount. The matter was remanded for reconsideration, emphasizing the correct interpretation of invoice values for refund purposes. The decision favored the petitioner, and the case was disposed of without costs.

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Issues:
1. Determination of the value of goods for refund of Integrated Goods and Services Tax (IGST).

Analysis:
The petitioner, a jewellery processor and manufacturer, regularly imports gold and exports gold jewellery, claiming refunds on Input Tax Credit (ITC) for IGST paid on gold imports. A refund claim for Rs. 21,00,000/- was filed for the period June 2018 to September 2018. However, the Adjudicating Authority granted only Rs. 88,295/- based on instructions from Board Circular No. 37/11/2018-GST. The Circular directs to consider the lower value between the export invoice and the value in the shipping bill for determining the refund. The petitioner contested that the FOB value declared in the GST Invoice should be considered for the refund, not the net realization value.

The main issue was the determination of the FOB value declared in the GST Invoice. The respondent argued that the FOB value should be USD 6479.39, considering the gold supplied free of cost. However, the Court disagreed, stating that the FOB value declared in the Invoice was USD 224846.75, and any discrepancy in the shipping bill value should result in the lower of the two values being sanctioned as a refund. The Court provided an illustrative example to clarify the interpretation of the invoice value, emphasizing that the total value of the goods sold should be considered, not just the net realization amount.

Consequently, the Court quashed the impugned order and remanded the matter to the Adjudicating Authority to process the refund application based on the FOB value declared in the GST Invoice. The judgment was in favor of the petitioner, emphasizing the importance of correctly interpreting the invoice value for refund purposes. The petition was disposed of with no order as to costs.

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