2024 (12) TMI 1183 - HC - GST

Authorities must reconsider IGST refund application for zero-rated supplies following CBIC Circular 197/09/2023-GST within twelve weeks

M/s. Kashi Exports Versus Union Of India & Ors.

The Gujarat HC disposed of a petition regarding IGST refund on zero-rated supplies by remanding the matter to respondent authorities. The court directed ... Refund the IGST on account of the zero-rated supply made by the petitioner - it is submitted that the matter may be remanded back to the respondent-Authorities to recalculate the refund and process the refund application as claimed by the petitioner as per the Clarification made by the CBIC in Circular No. 197/09/2023-GST dated 17th July, 2023. HELD THAT:- The matter is remanded back to the respondent-Authorities to reconsider the refund application made by the petitioner so as to grant the refund by applying the Circular No.197/09/2023-GST dated 17th July, 2023. Such exercise shall be completed within a period of twelve weeks from the date of receipt of the copy of this order after providing an opportunity of hearing to the petitioner. Petition disposed off by way of remand. Issues:Petition for refund of IGST amount on zero-rated supply. Interpretation of Rule 89(4) of CGST Rules. Application of Circular No. 197/09/2023-GST for calculating adjusted total turnover. Remand for reconsideration of refund application by respondent-Authorities.Analysis:The petitioner, a proprietorship firm engaged in exporting fresh fruits and vegetables, filed a petition seeking a refund of IGST amounting to Rs. 20,20,803.80 on account of zero-rated supply made. The petitioner exports goods without payment of GST under LUT as per the provisions of the CGST Act. The petitioner claimed entitlement to the unutilized accumulated ITC as per Section 54(3) of the CGST Act read with Rule 89(4) of the CGST Rules. The petitioner's refund claim was partially granted and partially rejected by the respondent No.4 based on Notification No. 14/2022, specifically Explanation (c) inserted in Rule 89(4) of the CGST Rules, which altered the calculation of the value of goods exported out of India. The petitioner contended that a subsequent Circular issued by the CBIC clarified the calculation of adjusted total turnover under Rule 89(4) of the CGST Rules, making them eligible for the full refund amount. The petitioner sought a remand to the respondent-Authorities for recalculation of the refund as per the CBIC Clarification.The respondent No.1 and No.2 had rejected the refund application based on Notification No. 14/2022 but acknowledged that if remanded, they would reconsider the application in light of the CBIC Clarification. The Court, after considering the submissions, remanded the matter back to the respondent-Authorities to reevaluate the refund application in accordance with Circular No. 197/09/2023-GST within twelve weeks from the date of the order, providing an opportunity of hearing to the petitioner. Consequently, the petition was disposed of, allowing for a fresh assessment of the refund claim based on the updated guidelines provided by the CBIC Circular.This judgment highlights the importance of staying updated with circulars and notifications issued by relevant authorities to ensure accurate interpretation and application of tax laws. It underscores the significance of seeking redressal through legal channels when faced with discrepancies in refund claims, emphasizing the need for a fair and thorough reconsideration of such matters by the competent authorities.