IGST Refund On Exported Goods Being Zero Rated Supplies Admissible As Excess Drawback Repaid: Gujarat High Court

The petitioner, ADF Foods Ltd., challenged the inaction on the part of the respondents not to sanction the refund claims of integrated goods and service tax paid on exported goods i.e. “Zero Rated Supplies” through Mundra Customs Port.

It was their case that due to oversight, the Custom House Agent had inadvertently selected “A” suffixed with the serial number in the drawback notification which provides for higher drawback rates concerning cases where CENVAT facility had not been availed, instead of “B” which provides for lower draw back for cases that are otherwise.

It was also the case of 5he petitioner that the excess drawback on account of availing of CENVAT credit facility had been repaid with interest and therefore the petitioner is entitled to the refund of IGST in respect of the shipping bills.

After reviewing the arguments presented by the counsels for the involved parties, the Court stated that there was no disagreement regarding the fact that the matter had already been addressed in a prior decision of the Gujarat Court, specifically in the case of Amit Cotton Industries v. Principal Commissioner of Customs 2019 (29) GSTL 200 (Guj).

The Court noted that during proceedings before a similar bench of this Court, the petitioner in that case had contended that it was entitled to claim a refund of Integrated Goods and Services Tax (IGST) in accordance with the provisions of the Act.

This assertion was grounded in the argument that the export supplies in question qualified as "Zero Rated Supplies."

The division bench of Justices Biren Vaishnav and Bhargav D Karia said, “Issue therefore raised in this petition is identical to the one decided by this Court and therefore, the petition on this count alone in light of the decision in the case of Amit Cotton (supra) deserves to be allowed and is accordingly allowed.”

"The respondents are directed to sanction the refund of IGST paid in context of shipping bills referred to in para 24(b) of the petition with simple interest @ of 6% from the date of the shipping bills till the date of actual refund. Rule is made absolutely accordingly with no order as to costs,” the bench directed.

Appearance: Mr.Prasannan Namboodiri, Advocate For Mr Hardik P Modh, Advocate (5344) For The Petitioner(S) No. 1 For The Respondent(S) No. 1,2,3,4,6,7,8 Mr Ankit Shah(6371) For The Respondent(S) No. 1 Mr Nikunt K Raval(5558) For The Respondent(S) No. 3,4,5,6,7,8 Notice Served For The Respondent(S) No. 2,5

LL Citation: 2023 LiveLaw (Guj) 193

Case Title: Adf Foods Ltd. Versus Union Of India

Case No.: R/Special Civil Application No. 24138 Of 2022

Click Here To Read The Order / Judgement