LI Network
Published on: November 25, 2023 at 07:41 IST
The Gujarat High Court ruled that the refund of Integrated Goods and Services Tax (IGST) paid on exported goods, classified as zero-rated supplies, is admissible.
The court held that the surplus drawback resulting from the utilization of the Cenvat Credit facility, repaid along with interest, qualifies the petitioner, ADF Foods Ltd., for the IGST refund.
ADF Foods Ltd. challenged the inaction of the respondents in sanctioning the refund claims of IGST paid on exported goods, identified as “Zero Rated Supplies” through Mundra Customs Port.
The petitioner argued that due to an oversight, the Custom House Agent mistakenly selected “A” suffixed with the serial number in the drawback notification, which provides higher drawback rates for cases where the CENVAT facility was not availed, instead of “B,” which provides lower drawback for cases that are otherwise.
The petitioner contended that the excess drawback resulting from the availing of the CENVAT credit facility had been repaid with interest. Therefore, the petitioner claimed entitlement to the refund of IGST concerning the shipping bills.
The High Court, after reviewing the arguments, noted that a similar matter had been addressed in a previous decision of the Gujarat Court, specifically in the case of Amit Cotton Industries v. Principal Commissioner of Customs 2019 (29) GSTL 200 (Guj).
The court highlighted that the issue raised in the current petition was identical to the one decided in the previous case.
Therefore, relying on the precedent, the court allowed the petition and directed the respondents to sanction the refund of IGST paid on the shipping bills with simple interest at 6% from the date of the shipping bills until the date of actual refund.
The judgment, delivered by the division bench of Justice Biren Vaishnav and Bhargav D Karia, emphasized the identical nature of the issue and directed the respondents to comply with the refund. The ruling concluded without imposing any costs on the petitioner.
Case Title: ADF Foods Ltd. Versus Union Of India
