2020 (1) TMI 90 - HC - GST

Refund of IGST - export of goods - zero rated supplies - Validity of circular No.37/2018-Customs - as per the circular, a person, who has made request consciously for refund of duty draw back, is not entitled to IGST/ITC claims - Sub-Section (3) of Section 16 of the IGST Act, 2017 HELD THAT - It is not in dispute that the petitioner exported cotton through seven shipping bills and paid a sum of ₹ 4,80,355/- towards IGST. It is also not in dispute that the statute provides for refund of IGST on export of materials. The only condition is that if the export is made after payment of tax, he is entitled to get refund. According to the petitioner, he has complied with the requirements of Sub-Clauses (a) and (b) of Sub-Rule (1) of Rule 96 of CGST Rules, 2017. Accordingly, he is entitled for refund and it cannot be ignored by citing the circular. The Hon'ble Supreme Court, in a similar circumstance, in the case of Commissioner of Central Excise, Bolpur v. Ratan Melting and Wire Industries 2008 (10) TMI 5 - SUPREME COURT held that circulars cannot prevail over the statute. Circulars are issued only to clarify the statutory provision and it cannot alter or prevail over the statutory provision. In that circumstance, it is clear that the explanation of provisions of drawback has nothing to do with the IGST refund - In view of that matter, Circular No.37/18-Customs, dated 09.10.2018 cannot have an application in the present case. The respondents are directed to refund the amount of IGST paid by the petitioner for the goods exported from India which are zero rated supplies, within a period of six weeks from the date of receipt of a copy of this order - Petition allowed.

Summary

Issues:
Claim for refund of IGST paid by the petitioner for exported goods under zero-rated supplies. Interpretation of circular affecting refund entitlement.

Analysis:
The petitioner sought a Writ of Mandamus for the refund of ?4,80,355 IGST paid for exported cotton. The petitioner exported after paying the tax, making them eligible for the refund of input tax credit. The respondents argued that the petitioner, by mistakenly claiming higher duty drawback and repaying it, had relinquished the right to claim IGST refund. They cited a circular stating that consciously requesting a duty drawback refund forfeits the IGST claim. The court noted that the statute allows for IGST refund on exports made after tax payment. The court referenced a Supreme Court case emphasizing that circulars cannot override statutory provisions. The court held that the circular in question did not apply to the IGST refund claim and directed the respondents to refund the IGST amount within six weeks. The court highlighted a Gujarat High Court decision supporting the petitioner's claim for IGST refund despite the circular's provisions. The Writ Petition was allowed, with no costs incurred.