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Gujarat High Court Directs CBIC To Refund IGST On Ocean Freight

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Gujarat High court Law Insider

Aastha Thakur

Published on August 08th August 2022 at 19:51 IST

The Gujarat High Court has ordered the Central Board of Indirect Taxes and Customs (CBIC) to refund the Integrated Goods and Service Tax (IGST) on ocean freight within six weeks along with the statutory rate of interest.

The Division Bench of Justice N.V. Anjaria and Justice Bhargav D. Karia put their reliance on the apex court decision in the case of Mohit Minerals Pvt. Ltd. Vs. Union of India in which GST on ocean freight was struck down.

The petitioner is a private limited company dealing in the business of processing edible oils and coffee etc. The petitioner filed the writ petition seeking the refund of IGST calculated on the amount of ocean freight charge with interest. The petitioner sought directions from the Court restraining the respondent authorities from collecting the IGST in terms of Notification No. 10 of 2017—Integrated Tax (Rate) dated 28.6.2017 and Notification No. 8 of 2017—Integrated Tax (Rate) of even date read with a corrigendum dated 30.6.2017.

The petitioner argued the Notification issued on both dates 28.6.2017 & read with a corrigendum dated 30.6.2017, came up for the consideration for its validity before the Gujarat HC.

The Court in response to writ application held that the announcements placing the tax under the reverse charge process are unconstitutional. Relying on the case cited by the SC where the Court overturned the importer’s requirement to pay tax under the reverse charge method.

Furthermore, the Court held the notifications to be unconstitutional and ultra vires the statute.

The Court allowed the petition as the notifications had already been declared as ultra vires.