IGST on Ocean Freight refunds granted after earlier levy was invalidated, permitting recovery of tax and interest.

Petitioner sought refund of IGST and interest paid under Entry No.10 of Notification No.10/2017 (levy on ocean freight under reverse charge) for CIF imports. The legal issue centred on entitlement to refund after the Supreme Court decision in Union of India v. Mohit Minerals and subsequent notifications altered the legal basis for the levy. The High Court concluded that, because the earlier levy was invalidated by the changed legal position, the petitioner is entitled to refund of the Integrated Tax and interest previously paid, and the revenue's rejection was set aside.

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Issues: Whether the petitioner is entitled to refund of Integrated Goods and Services Tax and interest paid under Entry No.10 of Notification No.10/2017-Integrated Tax (Rate) (levy on ocean freight under reverse charge) for imports on CIF basis.

Analysis: The claim arises from tax and interest paid while Entry No.10 of Notification No.10/2017-Integrated Tax (Rate) was in force. The Supreme Court in Union of India v. Mohit Minerals addressed the validity of levying IGST on ocean freight in CIF contracts by treating the importer as liable under the reverse charge; that decision and consequent notifications issued on 26-09-2023 altered the legal position. The question for disposal is the legal entitlement to refund for amounts paid prior to the prospective effective date of the later notifications in light of the judicial pronouncement invalidating the earlier levy. The factual record shows payment of tax and interest during the currency of the earlier notification and subsequent rejection of the refund claim by the revenue.

Conclusion: The refund of the Integrated Tax and interest paid under Entry No.10 of Notification No.10/2017-Integrated Tax (Rate) is allowed and the amount of tax and interest paid shall be refunded to the petitioner.

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