Big Relief to Exporters: Gujarat HC Declares Omission of Rule 96(10) Retrospective, Orders Processing of Pending IGST Refund Claims [Read Order]
The Gujarat High Court ruled that the omission of GST Rule 96(10) applies retrospectively, directing authorities to process all pending IGST refund claims and quashing related recovery actions.
![Big Relief to Exporters: Gujarat HC Declares Omission of Rule 96(10) Retrospective, Orders Processing of Pending IGST Refund Claims [Read Order]](https://images.taxscan.in/h-upload/2025/06/14/2044194-igst-exporters-gujarat-hc-rule-9610-pending-igst-refund-taxscan.webp "Big Relief to Exporters: Gujarat HC Declares Omission of Rule 96(10) Retrospective, Orders Processing of Pending IGST Refund Claims [Read Order]")
In a landmark judgment, the Gujarat High Court held that the omission of Rule 96(10) of the Central Goods and Services Tax (CGST) Rules through Notification No. 20/2024 dated 08.10.2024 will apply retrospectively to all pending proceedings. The Court directed that exporters who had paid IGST on exports, but were earlier denied refunds due to the now-omitted Rule 96(10), must have...
In a landmark judgment, the Gujarat High Court held that the omission of Rule 96(10) of the Central Goods and Services Tax (CGST) Rules through Notification No. 20/2024 dated 08.10.2024 will apply retrospectively to all pending proceedings. The Court directed that exporters who had paid IGST on exports, but were earlier denied refunds due to the now-omitted Rule 96(10), must have their refund claims processed without delay.
The case was led by Messrs Addwrap Packaging Pvt. Ltd. and a large group of exporters who challenged the validity of Rule 96(10). The petitioners were represented by Senior Advocate Mr. V. Sridharan, along with Advocates Mr. Anand Nainawati, Mr. Paresh Dave, Mr. Abhishek Rastogi, and others.
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They argued that Rule 96(10), as interpreted by tax authorities, unlawfully restricted IGST refund eligibility merely because certain inputs had been procured under exemption schemes like Advance Authorization or EPCG, even when other export conditions were fully met.
The counsel argued that such restrictions violated Section 16 of the IGST Act and Section 54 of the CGST Act, both of which guarantee zero-rated supply benefits and input tax credit refunds to exporters. They further argued that Rule 96(10) imposed blanket disqualification from refunds even where duty-free inputs made up only a small portion of the total procurement, which was unreasonable and disproportionate.
The GST department, represented by Additional Solicitor General Mr. Devang Vyas, defended Rule 96(10) on the ground that it was necessary to prevent exporters from availing "double benefits." The department submitted that exporters who received duty exemptions should not also be allowed to claim IGST refunds.
The bench, led by Justice Bhargav D. Karia and Justice D.N. Ray, rejected this reasoning and observed that no actual double benefit occurred, especially where exporters paid IGST and complied with filing obligations. The court held that Rule 96(10) was ultra vires the parent legislation and disproportionately penalized compliant exporters.
The court explained that procedural rules cannot override substantive rights granted by the statute. It further observed that recovery proceedings based on the disallowed refunds were legally unsustainable.
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The court declared that the retrospective application of the omission of Rule 96(10) must apply to all ongoing adjudications and refund claims. It ordered that refund applications previously rejected under the now-omitted rule be reconsidered and processed. The writ petitions were allowed.
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