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2021 (10) TMI 636 - HC - GSTRefund of unutilized ITC - exports of goods which are having NIL rate of export duty - first proviso to section 54(3) of CGST/ SGST Act - HELD THAT - Circular dated 20.09.2021 clarifies that only those goods which are actually subjected to export duty i.e., on which some export duty has to be paid at the time of export, will be covered under the restriction imposed under section 54(3) from availment of refund of accumulated ITC. Goods, which are not subject to any export duty and in respect of which either NIL rate is specified in Second Schedule to the Customs Tariff Act, 1975 or which are fully exempted from payment of export duty by virtue of any customs notification or which are not covered under Second Schedule to the Customs Tariff Act, 1975, would not be covered by the restriction imposed under the first proviso to section 54(3) of the CGST Act for the purpose of availment of refund of accumulated ITC. The respondents are directed to process the case of the petitioner herein having regard to the aforesaid clarification - petition allowed.
Issues:
Interpretation of the first proviso to section 54(3) of CGST/SGST Act regarding refund of unutilized ITC in case of exports of goods with NIL rate of export duty. Analysis: The High Court of Bombay heard arguments from both the petitioner's counsel and the respondents' standing counsel. The standing counsel for the respondents informed the court about a subsequent development regarding a clarification dated 20.09.2021. This clarification led the standing counsel to consent to the petition being allowed. The standing counsel presented communications supporting this stance, including one from the Assistant Commissioner, Legal, CGST, Goa. The circular dated 20.09.2021 was crucial, specifically referring to clause 3, which addressed the issue at hand. The circular clarified that the term 'subjected to export duty' in the first proviso to section 54(3) of the CGST Act means goods actually leviable to export duty and suffering export duty at the time of export. Goods with NIL rate of export duty or fully exempted from export duty are not considered subjected to export duty. Only goods actually subjected to export duty, i.e., on which some export duty has to be paid at the time of export, are covered by the restriction on refund of accumulated ITC under section 54(3). Goods not subject to export duty or covered by exemptions are not restricted from availing the refund of accumulated ITC. Both counsels agreed that the clarification resolved the issues raised in the petition in favor of the petitioner. Consequently, the court quashed the order-in-original and the order in appeal, directing the respondents to process the petitioner's case based on the clarification provided. The petition was allowed with no costs imposed, and all concerned parties were instructed to act upon the authenticated copy of the court's order.
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