Refund Can be Granted When The DBK Was Claimed and Refunded

Case Covered:

 M/s. Precot Meridian Limited

Versus

The Commissioner of Customs

Facts of the Case:

The present Writ Petition has been filed seeking for a Writ of Mandamus, directing the second respondent to sanction and to refund the amount of Rs.4,80,355/- [Rupees Four Lakhs and Eighty Thousand and Three Hundred and Fifty Five only] of IGST paid by the petitioner for the goods exported from India, i.e. ‘Zero Rated Supplies’.

The petitioner is an exporter of cotton. During September 2017, the exported cotton by way of seven shipping bills and paid Rs. 4,80,355/- towards IGST.

 Sub-Section (3) of Section 16 of the Integrated Goods and Services Tax Act, 2017 [for brevity, ‘IGST Act’], prescribes that a registered person making zero rated supply shall be eligible to claim a refund under either of the following options, namely:

(a) he may supply goods or services or both under bond or Letter of Undertaking, subject to such conditions, safeguards and procedure as may be prescribed, without payment of integrated tax and claim a refund of the unutilized input tax credit; or

(b) he may supply goods or services or both, subject to such conditions, safeguards and procedure as may be prescribed, on payment of integrated tax and claim a refund of such tax paid on goods or services or both supplied.

Observations of the Court:

It is not in dispute that the petitioner exported cotton through seven shipping bills and paid a sum of Rs.4,80,355/- towards IGST. It is also not in dispute that the statute provides for refund of IGST on the export of materials. The only condition is that if the export is made after payment of tax, he is entitled to get a refund. According to the petitioner, he has complied with the requirements of Sub-Clauses (a) and

(b) of Sub-Rule (1) of Rule 96 of CGST Rules, 2017. Accordingly, he is entitled to a refund and it cannot be ignored by citing the circular.

Order:

In view of the above discussion, the respondents are directed to refund the amount of Rs.4,80,355/- [Rupees Four Lakhs and Eighty Thousand and Three Hundred and Fifty Five only] of IGST paid by the petitioner for the goods exported from India which are zero-rated supplies, within a period of six weeks from the date of receipt of a copy of this order.

The Writ Petition is allowed accordingly. No costs.

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