Refund of IGST paid under RCM on Ocean Freight

[Ganeshan Kalyani]

GOKUL AGRO RESOURCES LTD. VERSUS UNION OF INDIA [2020 (2) TMI 1242 - GUJARAT HIGH COURT] has filed a writ petition in the Hon'ble Gujarat High Court, requesting, inter-alia, to grant refund of the amount of IGST already paid pursuant to Entry no.10 of Notifiation no. 10/2017-IT (Rate) i.e. on ocean freight.

The same High Court in the case of Mohit Minerals Pvt Ltd vs. Union of India [ 2020 (1) TMI 974 - GUJARAT HIGH COURT] had ruled that Entry no.10 of the Notification no. 10/2017-IT(Rate) dated 28.06.2017 is ultra vires the Section 5(3) of the IGST Act, 2017 as well as Article 14 of the Constitution of India. Thus, no tax is payable on ocean freight.

The principal laid down in the case of M/s. Mohit Minerals Pvt. Ltd. has been applied to the writ application filed by the Gokul Agro Resources. Thus, IGST on ocean freight is not required to be paid. However, for the past period since July 2017 whatever GST paid under RCM on ocean freight by the writ applicant shall be refunded. For the purpose of refund the writ applicant has to apply in appropriate application addressing to the competent authority.

The High Court said that the competent authority shall not raise any technical issue with regard to the claim for refund. Also, the refund process shall be undertaken within a period of four weeks from the date of receipt of the writ of this order.

The applicant has paid ₹ 1.28 Crores as IGST on ocean freight during F.Y.2017-18, ₹ 3.02 Crores during F.Y.2018-19 and ₹ 3.37 in the F.Y. 2019-20 (till November, 2019). Totaling to ₹ 7.69/- Crores of IGST paid under RCM on ocean freight. The same shall be refunded to the applicant.

Discussions to this article

[MEHULKUMAR PATEL]

whether now there is liability pay any GST on Ocean freight?

[Madhavan iyengar]

sir

in case of IGST paid on Ocean freight on RCM basis many companies have claimed credit of RCM

what is the implication in aforesaid case in light of the Gujarat high court judgement

[Somil Bhansali]

Dear All,

The decision given in case of Mohit Minerals Pvt Ltd vs. Union of India [ 2020 (1) TMI 974 - GUJARAT HIGH COURT] has been discussed in the video.The link is as follows: