gst rule 96(10)

[KANHAIYA AGRAWAL]

we received the goods from the foreign customer for the job work purposes under advance authorisation .

After completion of the job work we sent (export) it back to our customer after charging the job charges .

we cleared this transaction under gst as with payment of tax option on job work charges and also got the refund of gst.

Now the department is asking to pay the gst refund granted to us as this is hited by GST rule 96(10).

Can you please guide me on whether rule 96(10) of GST Act is applicable or not.

[KASTURI SETHI]

What is the period involved ? The information is required because Rule 96 (10) has been amended.

[KANHAIYA AGRAWAL]

Thank you Shri Kasturi Sethi sir,

This belongs to Financial year 2021-22.

[Padmanathan KV]

Writ Petitions challenging rule 96(10) is pending before High Courts. Some High Courts have granted stay in this matter. 

[KANHAIYA AGRAWAL]

Sir,  Shri Padmanathan Kollengode, can you please provide me with the copy/details of  Some High Courts that  have granted stay.

[KANHAIYA AGRAWAL]

Also, I want to submit that our case pertains to job work. We took advance authorisation for material receiving and sending (custom clearance) purposes only.  we did not pay any consideration for the material received for job work. We received only job work charges from the customer.

Now GST Rule 96(10) says "Rule 96(10) places restrictions on exporters from claiming refunds on IGST paid for exports if the exporters have availed the specified benefits on supply via the notifications mentioned in the provision.

Now supply in our job work case does not include the material received from customers .

If supply does not include this material then the provision under rule 96(10) does not attract.

Please guide...

[Shilpi Jain]

Rule 96(10) restriction applies to both supply of goods and supply of SERVICES also. Added to this, when you have imported the goods, it would have been by taking benefit of the notification referred in sub clause 'b' of the said rule.

However, I agree with the experts that this rule is ultra vires and is already challeged.. SO if the amount is huge you should consider filing a writ challenging the provision

AI Summary

IGST refund restriction for exporters may apply when notified benefits were availed, but legal challenges and stays exist. The central question is whether Rule 96(10) prohibits IGST refund claims for exports when the exporter availed specified notification-based benefits, including where imported principal goods were received for job work under advance authorisation and no consideration was paid for those goods. The rule applies to both goods and services and has been challenged in High Courts, with some courts granting stays; where factual characterisation of the receipt as 'supply' is determinative, litigative remedy may be advised for substantial amounts.