- Area : GST – Refund - IGST paid on export of goods under Advance Authorization
- Issue : Whether an exporter can claim the refund of the IGST paid on export of goods if such person avails IGST exemption under Advance Authorization (AA) ?
- Citation : COSMO FILMS LIMITED v. UOI (SCA No. 15833 of 2018) (Guj.)
- Decision : IGST exemption claimed under AA is required to be paid back with interest if the refund is claimed of IGST paid on exports.
Sec. 16(3) of the IGST Act, 2017 provides for two routes for claiming the refund of ITC on account of zero-rated supplies viz. (a) making supplies under LUT and claiming refund of the accumulated ITC (refund route) and (b) making supplies with payment of IGST and claiming refund thereof (rebate route). Rule 96(10) of the CGST Rules, 2017 as substituted by Notf. No. 54/2018 dt. 09.10.2018 provides that the persons claiming refund of IGST paid on exports (i.e. rebate route) should not have received supplies (a) on which the benefits of Notification No. 48/2017 dated 18th October 2017, Notification No. 40/2017 dated 23rd October 2017 or Notification No. 41/2017 dated 23rd October has been availed or (b) availed the benefit under Notification No. 78/2017 or Notification No. 79/2017. Further, an explanation has been added to Rule 96(10) vide Notification No. 16/2020-CT dt. 23.03.2020 to be applied from 23.10.2017 to clarify that the rebate route shall be permissible if only duty exemption is claimed and not IGST exemption.
Petitioner imports goods without payment of duty as well as IGST by virtue of Advance Authorizations. On the other hand the petitioner exports goods on payment of IGST and claims the refund thereof.
MANNER OF APPLICATION - (a) Text (b) Intent :
From the conjoint readings of the provision of Section 16 of the IGST Act, Section 54 of CGST Act and Rule 96(10) of CGST Rules it is apparent that the refund of IGST paid on export of goods cannot be claimed if the benefits of given notifications (which includes IGST exemption under AA) are availed. Said stand shall apply from 23.10.2017 in view of the Explanation. Thus exporters who have availed the refund under rebate route need to payback IGST (claimed earlier as exempt under Advance Authorization) along with interest. ITC can be availed of the said IGST.