The Delhi High Court in a significant case, allowed to grant the refund of IGST claimed by the petitioner on exported goods after deducting differential duty drawback.
M/s. Kishan Lal Kuria Mal International, the petitioner contended that Circular No. 37/2018 dated 09th October 2018, is ultra vires Section 16 of the IGST Act, 2017 read with Section 54 of CGST Act, 2017 as well as Rule 96 of CGST Rules, 2017 and violative of Articles 14, 19 and 21 of the Constitution of India.
Petitioners also seek directions to the Respondents to grant a refund of IGST paid on goods exported by the Petitioners during the Transitional Period (July-September, 2017) after deducting the differential amount of duty drawback, along with appropriate interest on such refund from the date of the shipping bill till the date of actual refund.
It was alleged by the Petitioners that even though drawback rates prescribed in respect of goods exported by the Petitioners were higher in column A (1%) than the rates prescribed in column B (0.15%), the rate at which IGST (18%) was paid on the goods exported was even much higher than the said rate in column A.
Further stated that the drawback was claimed under Column A because of the confusion and lack of technical knowledge prevalent during the transitionalphase about working on the new indirect tax laws.
In light of the decision of the Gujarat High Court in M/s Amit Cotton Industries v. Principal Commissioner of Customs, Justice Manmohan and Justice Manmeet Pritam Singh Arora observed that the circular explains the provisions of the drawback and it has nothing to do with the IGST refund.
The Bench allowed thewrit applicationand the respondents are directed to immediately sanction the refund of the IGST paid regarding the goods exported,i.e. zero-rated supplies, with 7% simple interest from the date of the shipping bills till the date of actual refund.
Petitioner was represented by Advocates, Ms Sakshi Singhal & Ms Lovely Singh and the respondents were represented by Advocates, Mr Himanshu Pathak, Ms Anushree Narain & Ms Sapna Jain, Shoumendu Mukherji with Ms Meghna Sharma & Mr Rajat Kashyap.
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