In a recent decision the Gujarat High Court ordered the refund of Integrated Goods and Service Tax (IGST), with interest in an inadvertent tax case.
The petitioner, Tagros Chemicals India Pvt Ltd, received purchase order from registered exporter viz., Quality Biz Chem India Pvt. Ltd., Mumbai to supply the goods at the concessional rate of IGST at the rate of 0.1% in terms of Notification No.41/2017 – Integrated Tax (Rate) dated 23.10.2017 as they intended to export the goods.
On the basis of the purchased order, the petitioner had supplied the goods to the buyer on payment of full duty (under an error) of IGST at the rate of 18% instead of concessional rate of 0.1% in terms of Notification No.41/2017 – Integrated Tax (Rate) dated 23.10.2017. The petitioner raised Tax Invoice dated 30.06.2019 for the taxable value of Rs.1,29,00,000/- and IGST amount of Rs.23,22,000/- was charged in the said tax invoice under an error.
The petitioner, therefore, filed refund claim as prescribed under the Integrated Goods and Service Tax Rules, 2017.
The advocate for the petitioner mainly contended that the respondents have committed an error in denying the benefit of concessional rate of duty as provided under notification No.41 of 2017 – Integrated Tax (Rate) on the inter-State supply of taxable goods, which were ultimately exported on the basis that the conditions prescribed under Notification No.41 of 2017 – Integrated Tax were to comply before the export takes place, whereas the language of the said Notification does not provide such condition.
Clause – 2 of the said Notification provides a specific bar in claiming the benefit of the notification if the goods are not exported within a period of 90 days from the date of issue of tax invoice. Thus, in absence of such situation, the respondent authority has no authority and jurisdiction to deny the benefit of concessional rate of duty for any reason.
A Division Bench of Justices Vipul M Pancholi and DM Desai observed that “The duty is cast upon the registered recipient to export the goods within a period of 90 days from the date of issue of tax invoice by the registered supplier. In the present case, the petitioner has placed on record the invoice which is of 30.6.2019 and thereafter the buyer i.e. Quality Biz Chem India Pvt. Ltd., Mumbai has exported the goods under shipping bill.”
The Court further went on to note that the conditions mentioned in the aforesaid notification clearly envisages that all the conditions are not to be fulfilled or complied with by the petitioner but the conditions are to be complied with by the exporter. The petitioner uploaded the refund claim on 12.3.2021 however, the respondent on a technical ground did not grant the refund and passed the impugned order dated 22.6.2021.
“The order dated 22.6.2021 passed by the respondents is hereby quashed and set aside and the respondents are directed to refund the amount of 23,09,100/- with interest applicable as per law within reasonable time from the date of receipt of copy of this judgment. Rule is made absolute” the Bench concluded.
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