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2022 (4) TMI 819 - HC - GSTRefund of IGST - Zero Rated Supplies - it is alleged that the writ applicant had declared on the shipping bill for claiming the higher rate of duty drawback - HELD THAT - Undisputedly, the writ applicant is holding the valid registration No. under the Goods and Service Tax Act, 2017. The writ applicant being an exporter is entitled to the benefit as envisaged under the provisions of GST / IGST Act, 2017. Admittedly, the goods are exported outside India for the relevant months of July, 2017 and August, 2017 as emerged from the various documents in the nature of GST invoices, export invoices, shipping bills, export general manifest bills, bill of lading, one cannot lose sight of the fact that the at the relevant stage, the writ applicant seems to have paid IGST @ 5% as reflected in the aforesaid bill. Bare reading of the contents of the shipping bills referred to the fact that the declaration has also been made by the writ applicant firm about its intent to avail reward as made available under Mercantile Scheme. Thus, undisputedly, the goods being exported out of India, the same are to be treated and termed as Zero Rated Supplies as provided under Section 16 of the IGST Act. Rule 96 of the CGST Rule, 2017 - HELD THAT - It provides that the shipping bills filed by an exporter of goods shall be deemed to be an application for refund of integrated tax paid on the goods export outside India and such application shall be deemed to have been filed only when the person in charge of conveyance carrying exported goods duly filed and exported manifestly or an export report covering the date and proof and shipping bill and date of export and the application must have furnished the valid return the in the Form GSTR 1 and GSTR-3B - the writ applicant is otherwise entitled to the refund of IGST as envisaged under the relevant provisions of IGST Act, 2017. The respondent Authority are directed to immediately sanction the refund of IGST aggregating to an amount of ₹ 37,10,326/- in regard to the shipping bills exported as Zero Rated Supplies within a period of two weeks from the date of receipt of this order - petition allowed.
Issues Involved:
1. Refund of IGST for exported goods. 2. Entitlement to "Zero Rated Supplies" benefit. 3. Error in claiming higher duty drawback instead of IGST refund. 4. Validity of Circular No. 37/2018-Customs dated 09.10.2018. 5. Manual processing of refund claims due to EDI system limitations. 6. Interest on delayed refund. 7. Costs of litigation due to respondent authorities' actions. Detailed Analysis: 1. Refund of IGST for Exported Goods: The petitioner, a proprietorship concern engaged in exporting agricultural products, filed for a refund of ?37,01,326/- IGST paid on exported goods during July and August 2017. The petitioner provided all necessary documents, including GST invoices, export invoices, shipping bills, and statutory returns (GSTR-1 and GSTR-3B). 2. Entitlement to "Zero Rated Supplies" Benefit: The petitioner claimed the "Zero Rated Supplies" benefit under Section 16 of the IGST Act, 2017, which allows exporters to claim a refund of IGST paid on exported goods. The court confirmed that the petitioner is entitled to this benefit as the goods were exported outside India. 3. Error in Claiming Higher Duty Drawback Instead of IGST Refund: The petitioner's customs broker mistakenly claimed a higher duty drawback rate instead of the IGST refund by using the code "A" instead of "B". Upon realizing the mistake, the petitioner approached the Assistant Commissioner of Customs for an amendment, which was granted. The petitioner also surrendered the excess drawback amount with interest. 4. Validity of Circular No. 37/2018-Customs dated 09.10.2018: The respondent authorities rejected the IGST refund claim based on Circular No. 37/2018-Customs, stating that once a higher duty drawback is claimed, IGST refund cannot be granted. The court found this circular to be contrary to the statutory provisions of the IGST and CGST Acts, and not binding on the court. The court referred to its previous judgment in Amit Cotton Industries vs. Principal Commissioner of Customs, which held that such circulars cannot override statutory provisions. 5. Manual Processing of Refund Claims Due to EDI System Limitations: The respondent authorities cited EDI system limitations as a reason for not processing the refund. The court dismissed this argument, stating that the EDI system's limitations cannot override the petitioner's statutory right to a refund. 6. Interest on Delayed Refund: The petitioner requested interest at 18% on the delayed refund amount. The court directed the respondent authorities to pay interest at 9% from the date of raising the shipping bills until the actual date of refund realization. 7. Costs of Litigation Due to Respondent Authorities' Actions: The petitioner sought litigation costs due to the respondent authorities' actions. The court did not explicitly address this issue in the final order but focused on the statutory entitlement to the refund and interest. Conclusion: The court directed the respondent authorities to sanction the refund of ?37,01,326/- within two weeks and pay interest at 9% from the date of the shipping bills until the refund is realized. The petition was disposed of accordingly.
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