Export With payment of Tax (Intertwining of GST Refunds with Benefits under Advance Authorization)

[Arpit Patel]

Department of CGST ( senior intelligent officer) have issued summons under section 70 of Central GST regarding restriction under Rule 96(10) is only in the context of claiming refund of the IGST paid on the exports if the given person has availed the benefit of IGST exemption on imports against Advance Authorization under Notf. No. 79/2017 – Customs dt. 13.10.2017 claiming the IGST exemption on imports.

Sec. 16(3) of the IGST Act, 2017 provides for two routes to claim the refund of the accumulated ITC in case of zero-rated supplies.The claiming of the refund under each of the given two routes is subject to such conditions, safeguards and procedure as prescribed. Can a blanket restriction under Rule 96(10) on opting for the with payment route in cases where the IGST exemption has been claimed against Advance Authorization be considered as “conditions, safeguards and procedure” which have been prescribed by virtue of Sec. 16(3) of the IGST Act and section 54 of the CGST Act, 2017?

IGST calimed as exempt amount is very huge so we can fight against the authority and challenge rule 96(10) in court , If the department considering recent honorable Gujarat high court judgment in the case of Cosmo Films Ltd. v. UOI (SCA No.15833 of 2018) = 2020 (10) TMI 1099 - GUJARAT HIGH COURT had an occasion to examine the said Rule 96(10). The Court held that the said restriction shall apply from 23.10.2017. Further the Court held that the exporters who have availed the refund are required to pay back the IGST claimed as exempt on imports along with interest.

[YAGAY andSUN]

https://www.business-standard.com/article/current-affairs/supreme-court-stays-gujarat-high-court-order-on-pre-import-conditions-119100401214_1.html

AI Summary

Restriction on refund route as a statutory condition under IGST Act challenged; Gujarat High Court ruling and Supreme Court stay noted. Whether an administrative rule that bars exporters who availed IGST exemption on imports under Advance Authorization from choosing the with-payment refund route can be treated as permissible specification of conditions, safeguards and procedure under the statutory refund framework; the issue engages the interplay between Advance Authorization IGST exemptions, the procedural bar to the with-payment route, potential restitution of IGST and interest where refunds were previously granted, and judicial scrutiny of the rule's temporal application and validity.