2022 (2) TMI 661 - HC - GST

Refund of IGST - Export of goods - Zero Rated Supplies - calculation of interest from the date of shipping bill up till the date on which the amount of refund is paid to the petitioner herein - HELD THAT - The issue raised in the present writ application is no longer res integra after the decision of this High Court in the case of M/S AMIT COTTON INDUSTRIES THROUGH PARTNER VELJIBHAI VIRJIBHAI RANIPA VERSUS PRINCIPAL COMMISSIONER OF CUSTOMS 2019 (7) TMI 472 - GUJARAT HIGH COURT where it was held that respondents are directed to immediately sanction the refund of the IGST paid in regard to the goods exported i.e. zero rated supplies with 7% simple interest from the date of the shipping bills till the date of actual refund. This writ application directing the respondents to immediately sanction the refund of the I.G.S.T. paid in regard to the goods exported i.e. the Zero Rated Supply with 9% simple interest from the date of the shipping bills till the date of actual refund - Application allowed.

Summary

Issues:
1. Refund of IGST paid on exports.
2. Delay in refund process.

Analysis:

Issue 1: Refund of IGST paid on exports
The petitioner, engaged in the export business, sought a refund of IGST amounting to ?1,00,424 paid for goods exported as 'Zero Rated Supplies'. The petitioner claimed the right to refund under Section 16 of the I.G.S.T. Act, which allows registered persons making zero-rated supplies to claim a refund of the integrated tax paid on such supplies. The petitioner had submitted all necessary documents like GST invoice, export invoice, shipping bills, export general manifest, and bill of lading to support the export transactions. Despite the exports taking place in September 2017, the IGST refund had not been processed, leading to financial difficulties for the petitioner.

Issue 2: Delay in refund process
The petitioner approached the High Court through a writ application under Article 226 of the Constitution seeking relief for the delayed refund of IGST. The court noted that the issue raised was similar to a previous judgment by the High Court in the case of Amit Cotton Industries vs. Principal Commissioner of Customs. The court referred to a letter dated January 3, 2020, sent by the petitioner to the Deputy Commissioner of Customs requesting the refund of IGST. Despite no response from the authorities, the court directed the respondents to immediately sanction the refund of IGST paid on the exported goods, along with 9% simple interest from the date of the shipping bills until the actual refund date. Consequently, the court disposed of the writ application in favor of the petitioner, emphasizing the importance of timely processing of refund claims to prevent financial hardships for exporters.

This detailed analysis covers the issues of IGST refund on exports and the delay in the refund process as addressed in the judgment by the Gujarat High Court.