Gujarat High Court directs GST Authorities to immediately Sanction Refund towards IGST paid on Goods exported made via Shipping Bills [Read Order]

Gujarat High Court - GST Authorities - Refund - IGST - Goods exported - Shipping Bills - Taxscan

The Gujarat High Court directed the Goods and Service Tax Authorities to immediately sanction refund towards IGST paid in respect to goods exported made via shipping bills.

The writ­-applicant, Aawadkrupa Plastomech Pvt. Ltd. wants the respondent authorities to sanction the refund of Integrated Goods and Service Tax (IGST) paid in respect of the goods exported i.e. ‘Zero Rated Supplies’ vide the shipping Bill.

The respondents authorities have illegally withheld the refund of the IGST. The claim of the writ­-applicant came to be rejected under Section­ 54 of the Central Goods and Service Tax Act, 2017 read with Section­16 of the Integrated Goods and Service Tax Act, 2017.

The claim came to be declined on the ground that the writ applicant had claimed higher duty drawback. According to the writ­-applicant, there is no legal embargo to avail the drawback at higher rate on one hand and availing refund of the IGST paid with regard to the ‘Zero Rated Supply’ i.e. the goods exported out of India on the other.

As provided in Rule­96 of the CGST Rules, 2017, the shipping bill filed by an exporter of goods shall be deemed to be an application for refund of the Integrated Tax paid on the goods exported out of India and such application shall be deemed to have been filed only when the person in charge of conveyance carrying the export goods duly files an export manifest or an export report covering the number and the date of shipping bills or bills of export and the applicant has furnished a valid return in the Form – GSTR­3 or Form GSTR­3B.

While filing the shipping bill the Custom House Agent (CHA) inadvertently failed to disclose the details of IGST paid i.e. Rs.4,53,534/­ and was filed disclosing only the drawback amount.

The mistake was rectified and had been properly disclosed in its return filed under the CGST Act for the month of July, 2017 in the Form GSTR-­01 and GSTR-­3B.

The petitioner had exported Rope Making Machine HSN Code 84794000 which attracts the same rate under both the columns (4) & (6) respectively i.e. 2 per cent.

The rationale for not allowing the refund of IGST for those exporters, who claim higher duty drawback is that the higher duty drawback reflects the elements of Customs, Central Excise and Service Tax taken together and since higher duty drawback is already being availed than granting the IGST refund would amount to double benefit as the Central Excise and Service Tax has been subsumed in the GST.

The division bench of Justice J.B. Pardiwala and Justice Ilesh V. Vora, while allowing the refunds said that if the refund of the principal amount is not sanctioned and actually paid to the writ applicant within the period of six weeks from the date of the receipt of this order, then interest would start accumulating at the rate of 9% and the amount shall be paid.

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