Dear experts,
An EOU has taken refund of IGST paid on exports after 9th Oct 2018 even though after such date as per Rule 96(10), EOU claiming IGST and BCD exemption on imports was not allowed to take IGST refund and could only take ITC refund.
Now assessee served notice to repay the amount with interest and penalty. However, situation is revenue neutral since as per calculation by Rule 89, unutilised ITC refund for the same period would have been more than refund already taken. However, there is violation of Rule 96 and therefore procedural lapse at end of assessee.
Is there any legal grounds available with assessee to argue matter in its favour?
EOU Challenges IGST Refund Repayment Notice Under Rule 96(10); Debates Legality of Restrictions vs. IGST Act Section 16 An Export Oriented Unit (EOU) claimed an IGST refund on exports post-October 9, 2018, contrary to Rule 96(10), which restricts such claims if IGST and BCD exemptions are availed on imports. The assessee faces a notice to repay the refund with interest and penalty, despite the situation being revenue neutral due to an unutilized ITC refund. The discussion revolves around the legality of the restriction, with one party arguing that Section 16 of the IGST Act does not permit such limitations, while another contends that Rule 96(10) is valid under the prescribed conditions and safeguards. (AI Summary)
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