IGST Refund Denial to Advance Authorisation Holders Applies Prospectively w.e.f. Oct 9, 2018: Surat GST Commissionerate [Read Notification]
Recognizing Notification No. 54/2018, Surat GST Commissionerate Rules IGST Refund Denial to Advance Authorisation Holders Applies Prospectively w.e.f. October 9, 2018
![IGST Refund Denial to Advance Authorisation Holders Applies Prospectively w.e.f. Oct 9, 2018: Surat GST Commissionerate [Read Notification]](https://www.taxscan.in/wp-content/uploads/2025/01/GST-GST-Commissionerate-Surat-GST-Commissionerate-IGST-Refund-cases-TAXSCAN.jpg "IGST Refund Denial to Advance Authorisation Holders Applies Prospectively w.e.f. Oct 9, 2018: Surat GST Commissionerate [Read Notification]")
The Surat GST Commissionerate ruled that the denial of IGST refunds to Advance Authorisation Holders applies prospectively with effect from 9th October 2018 as clarified by Notification No. 54/2018. Ami Organics Limited, the taxpayer, is a manufacturing and export company engaged in the production of acetals, hemiacetals, and other related compounds. The taxpayer availed the benefit of...
The Surat GST Commissionerate ruled that the denial of IGST refunds to Advance Authorisation Holders applies prospectively with effect from 9th October 2018 as clarified by Notification No. 54/2018.
Ami Organics Limited, the taxpayer, is a manufacturing and export company engaged in the production of acetals, hemiacetals, and other related compounds. The taxpayer availed the benefit of the Advance Authorisation Scheme which allowed duty-free imports of raw materials, and also claimed IGST refunds on the exports of finished goods for the period October 2017 to March 2018.
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The department issued a show cause notice alleging that IGST refunds amounting to Rs. 7,64,91,294 were erroneously granted citing violations of Rule 96(10) of the Central Goods and Services Tax (CGST) Rules, 2017.
The department stated that Rule 96(10) as amended by Notification No. 39/2018 disallowed IGST refunds if the exporter availed exemptions on imported inputs and that this restriction applied retrospectively from 23rd October 2017.
The taxpayer submitted that Notification No. 54/2018 which further amended Rule 96(10), explicitly clarified that the restriction applied only prospectively from 9th October 2018. The taxpayer relied on judicial rulings such as Cosmo Films Ltd. v. Union of India and Zaveri and Co. Pvt. Ltd. v. Union of India, where the Gujarat High Court held that Notification No. 54/2018 could not be enforced retrospectively.
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The taxpayer also relied on the Kerala High Court’s ruling in Sans Laboratories Pvt. Ltd. v. Union of India which declared the retrospective application of Rule 96(10) of the Central Goods and Services Tax (CGST) Rules, 2017 to be arbitrary and beyond legal authority.
The department argued that allowing such refunds would result in "double benefits" where the taxpayer would gain exemptions on imported inputs and refunds on exported goods.
The Additional Commissioner, Amar Bahadur Singh observed that courts like the Gujarat and Kerala High Courts consistently ruled against the retrospective application of Rule 96(10) of the Central Goods and Services Tax (CGST) Rules, 2017.
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The Commissioner ruled that Notification No. 54/2018 was prospectively applied only from 9th October 2018 and the refunds for the period before this date were valid. The Commissionerate quashed the show cause notice, upholding the taxpayer’s claim for refunds.
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