IGST refund on zero-rated exports cannot be denied by circular where statutory refund rules govern entitlement.

Refund of IGST on zero-rated exports under Section 16(3) of the IGST Act, Section 54 of the CGST Act and Rule 96 of the CGST Rules cannot be denied merely by relying on Circular No. 37/2018. The text states that the refund mechanism under the statute and rules governs the claim, and a circular cannot prevail over Rule 96 to defeat refund entitlement. On that basis, the rejection of refund was unsustainable, and the exporter was entitled to refund of the IGST paid together with applicable interest.

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Issues: Whether refund of Integrated Goods and Services Tax paid on zero-rated exports could be denied on the strength of Circular No. 37/2018 despite the refund mechanism under the Integrated Goods and Services Tax Act, the Central Goods and Services Tax Act and the Central Goods and Services Tax Rules.

Analysis: The refund claim arose from zero-rated exports and was founded on Section 16(3) of the Integrated Goods and Services Tax Act, 2017, Section 54 of the Central Goods and Services Tax Act, 2017 and Rule 96 of the Central Goods and Services Tax Rules, 2017. The rejection rested only on Circular No. 37/2018. The Court treated the issue as already settled and held that a circular cannot prevail over Rule 96, and therefore cannot sustain denial of the refund.

Conclusion: The rejection of refund was unsustainable and the petitioner was entitled to refund of the IGST paid together with applicable interest.

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