2023 (10) TMI 306

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....he IGST Act'). The petitioner also claims that Rule 89(4)(C) of the Rules falls foul of Article 14 of the Constitution of India and therefore, is liable to be struck down. 3. In addition, the petitioner contends that Sub-rule (4)(C) of Rule 89 of the said Rules, which was substituted by the Central Goods and Services Tax Act (Third Amendment) Rules, 2020 with effect from 23.03.2020, has no application for refund in respect of exports made prior to the said date. FACTUAL CONTEXT 4. The petitioner's claim for refund relates to the period 01.10.2018 to 30.09.2019. The petitioner had filed four separate applications for four quarters comprising of the period 01.10.2018 to 30.09.2019. The said applications were rejected by four separate orders (orders dated 15.09.2020, 24.09.2020, 22.10.2020 and 05.11.2020). 5. The petitioner's claim for refund was rejected on essentially, two grounds. First, that the petitioner had not produced the relevant Foreign Inward Remittance Certificates (FIRCs) and co-related them with the exports made. And second, that the computation of the eligible export turnover was not compliant with Rule 89(4)(C) of the Rules. 6. The petitioner appealed t....

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...., supplier, as declared by the supplier, whichever is less, other than the turnover of supplies in respect of which refund is claimed under sub-rules (4A) or (4B) or both; (D) "Turnover of zero-rated supply of services" means the value of zero-rated supply of services made without payment of tax under bond or letter of undertaking, calculated in the following manner, namely:- Zero-rated supply of services is the aggregate of the payments received during the relevant period for zero-rated supply of services and zero-rated supply of services where supply has been completed for which payment had been received in advance in any period prior to the relevant period reduced by advances received for zero-rated supply of services for which the supply of services has not been completed during the relevant period; (E) "Adjusted Total Turnover" means the sum total of the value of- (a) the turnover in a State or a Union territory, as defined under clause (112) of section 2, excluding the turnover of services; and (b) the turnover of zero-rated supply of services determined in terms of clause (D) above and non-zero-rated supply of services, excluding-....

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....t period without payment of tax under bond or undertaking, or the value which is 1.5 times of similarly placed goods domestically supplied by the supplier or a similarly placed supplier, whichever is less. Thus, if the value of the zero-rated supplies exceeded 1.5 times the value of similar goods domestically supplied, the export turnover would necessarily be kept at that value. 14. The effect of the added condition is that the refund of ITC is restricted by capping the value of the export turnover to 1.5 times the value of similarly placed domestic supplies. Thus notwithstanding the value of the goods exported and the export proceeds realised by an exporter, the value of exports would be considered as 1.5 times the value of such goods, as domestically supplied if the said value was less than the actual value of exports. 15. According to the respondents, Clause (C) of Sub-rule (4) of Rule 89 of the Rules is a procedural provision for the purpose of calculation of the admissible refund of ITC. Thus, the amended clause is applicable retrospectively. 16. There is no dispute that the amended Sub-rule (4) of Rule 89 of the Rules applies prospectively; that is, with effect from ....

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....vices are exported. 19. The expression 'turnover' as used in the context of exports of goods, in its ordinary sense means the gross value of exports on a historical basis. In Secy., Ministry of Chemicals & Fertilizers, Govt. of India v. Cipla Ltd., (2003) 7 SCC, the Supreme Court had observed as under: "5.7. "Turnover" in its ordinary sense connotes amount of business usually expressed in terms of gross revenue transacted during a specified period (vide Collins Dictionary). Broadly speaking, it represents the value of the goods or services sold or supplied during a period of time. The amount of money turned over or drawn in a business during a certain period, is another shade of meaning." 20. It is obvious that the expression 'turnover' has to be read in reference to the period to which it relates. It must necessarily read to mean the period during which the turnover is effected, that is, the date when the supplies are made. It would thus follow that the ITC relatable to the turnover of a period must - unless it is indicated otherwise either expressly or by necessary implication - be ascertained in terms of the rules as in force during the said period. 21. In this....