CBIC notifies omission of GST Rules 96(10), 89(4A), and 89(4B) for Streamlined Refunds on Zero-Rated Exports [Read Notification]

In a significant move aimed at easing the refund process for exporters, the Central Board of Indirect Taxes and Customs (CBIC) has omitted certain provisions from the Central Goods and Services Tax (CGST) Rules, 2017.

This change, effective from October 8, 2024, is expected to simplify the refund mechanism and expedite the process for businesses involved in exports.

The decision to omit Rules 96(10), 89(4A), and 89(4B) from the CGST Rules follows recommendations made during the 54th GST Council Meeting on September 9, 2024. These rules had imposed restrictions on exporters who availed concessional or exemption benefits on imported inputs, which, in turn, created bottlenecks in the refund process.

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Previously, exporters who imported inputs without paying integrated tax (IGST) or compensation cess under notifications No. 78/2017 and 79/2017-Customs had to meet specific conditions when applying for refunds. Even if they paid IGST and compensation cess later on, their refunds could be blocked due to technicalities under Rule 96(10) of the CGST Rules.

Recognizing the difficulties this caused exporters, the GST Council recommended the omission of these restrictive rules to make the refund process more efficient. This change is expected to ease compliance burdens, particularly for businesses that were facing delays due to the reassessment of their Bill of Entry for imported inputs.

The CBIC, through Notification No. 20/2024 - Central Tax dated October 8, 2024, has officially omitted the rules. The changes include:

Rule 96(10): Earlier, this rule restricted the refund of IGST on exports if the exporter availed certain benefits on imported inputs. Its removal now allows exporters to claim refunds without these limitations.

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Rules 89(4A) & 89(4B): These rules dealt with refund claims related to zero-rated supplies and imposed specific conditions on exporters who used inputs under concessional or exemption notifications. Their omission removes the complexity involved in calculating refund claims, making the process smoother.

### Benefits for Exporters

These changes are seen as a positive step toward reducing procedural hurdles for exporters. The removal of these rules will not only speed up refund claims but also address long-standing issues related to working capital blockages and delayed refunds. Furthermore, the updated definitions of terms like “Net ITC” and “Adjusted Total Turnover” are expected to enhance clarity and transparency in refund calculations.

To Read the full text of the Notification CLICK HERE

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