Bombay High Court Allows IGST Refund On Zero Rated Supply Along With 7% Interest

The Bombay High Court has allowed the refund of IGST on zero-rated supply along with 7% interest.

The bench of Justice G.S. Kulkarni and Justice Jitendra Jain has observed that the petitioner was entitled to a refund of the IGST paid on the exports in question, as it is certain that this is not a case where the petitioner is availing of any double benefit, that is, the IGST refund and a higher duty drawback.

The petitioner/assessee claimed an amount of Rs. 21,41,451 in respect of the zero-rated supply, which was denied by the department.

The Petitioner contended that the Petitioner had filed a GST Return in Form No.GSTR-1 for the month of August 2017, inadvertently mentioning an incorrect Invoice number and Port Code in respect of export transactions made. On realising this, the Petitioner filed an amended or corrected return, amending particulars with respect to the Tax invoice and correcting the invoice number and the Port Code.

The Petitioner contended that despite all complaints, there was no response from the Respondents. The Petitioner lodged a grievance in regard to the IGST refund with the Central Public Grievance Redress And Monitoring System (CPGRAMS). The Petitioner’s grievance was acknowledged. The Petitioner received an email stating that the Petitioner’s grievance has been disposed of on the ground that the Petitioner had availed of a higher duty drawback on its exports under the said Export Invoice and corresponding Shipping Bill.

The Petitioner stated that the reasons for rejection were not correct. The Petitioner submitted a fresh grievance on October 9, 2020, justifying and clarifying that it had not realised any higher amount of drawback against the Shipping Bill.

However, by e-mail from the CPGRAMS, the Petitioner again received a communication that the grievance had been closed.

The petitioner contended that the petitioner's exports were admittedly a zero-rated supply in terms of Section 16 of the IGST Act. Hence, considering the clear position in law as seen from the provisions of Section 54 of the CGST Act as well as Rule 96 of the CGST Rules, such a refund could not be denied to the Petitioner.

The court noted that the case of the Petitioner is a case of zero-rated supply under Section 16(3) of the IGST Act. Rule 96 of the CGST Rules, which provides for the refund of integrated tax paid on goods or services exported out of India, has become applicable.

The court held that the petitioner is entitled to a refund of the IGST paid on the exports, as it is certain that this is not a case where the Petitioner is availing of any double benefit, that is, the IGST refund and a higher duty drawback.

Case Title: Sunlight Cable Industries Versus The Commissioner of Customs

Case No.: Writ Petition No.284 Of 2021

Date: 27/06/2023

Counsel For Petitioner: Prathamesh Gargate

Counsel For Respondent: Jitendra B. Mishra

Click Here To Read The Order