IGST export refund must be processed under the GST refund mechanism when Rule 96 withholding conditions are not met

Refund of IGST paid on exports was required to be examined under Rule 96 of the CGST Rules, 2017, because the exports were undisputed and the refund request specifically sought release of IGST on exported goods. The rejection had relied only on Section 149 of the Customs Act, 1962 and had not considered the GST refund framework. As the case did not fall within the withholding situations under Rule 96(4), and the exported goods were covered by Notification No. 1/2017-Integrated Tax (Rate), the refund claim was directed to be processed under the GST mechanism.

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Issues: Whether the petitioner's claim for refund of Integrated Goods and Services Tax paid on exports was required to be processed under Rule 96 of the Central Goods and Services Tax Rules, 2017, notwithstanding the rejection of the amendment request under Section 149 of the Customs Act, 1962.

Analysis: The exports were undisputed and the refund application specifically sought release of IGST paid on exported goods. The rejection order had proceeded only on Section 149 of the Customs Act, 1962 and did not examine the claim in the context of Rule 96 of the Central Goods and Services Tax Rules, 2017. The Court noted that the case did not fall within the withholding situations under Rule 96(4), and that the goods exported were covered by Notification No. 1/2017-Integrated Tax (Rate) dated 28.06.2017. In those circumstances, the refund claim was directed to be dealt with under the GST refund mechanism.

Outcome: The respondents were directed to process the petitioner's refund claim under Rule 96 of the Central Goods and Services Tax Rules, 2017, and the matter was kept pending for further orders.

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