In Writ Petition No.284 of 2021 -BOM HC- Bombay High Court orders refund of IGST paid by Sunlight Cable Industries for exported goods
Justice G.S. Kulkarni & Justice Jitendra Jain [27-06-2023]

Read Order: Sunlight Cable Industries v. The Commissioner of Customs NS II and Ors

Chahat Varma

New Delhi, July 12, 2023: The Bombay High Court has ruled in favour of Sunlight Cable Industries (petitioner), directing the refund of IGST paid by the petitioner for the exported goods. The goods were classified as zero-rated supplies under Section 16(3) of the Integrated Goods and Services Tax Act (IGST Act) and the High court has ordered the refund of Rs. 21,41,451, along with simple interest at a rate of 7% per annum.

Briefly stated, the petitioner had sought a refund of IGST paid on its exports of insulated cables to a company in Myanmar. The petitioner argued that the export should be considered a zero-rated supply in terms of Section 16(3) of the IGST Act read with Section 54 of the Central Goods and Services Tax Act (CGST Act) and Rule 96 of the Central Goods and Services Tax Rules (CGST Rules).

The division bench of Justice G.S. Kulkarni and Justice Jitendra Jain observed noted that it was undisputed that the petitioner's case fell under the category of zero-rated supply as per Section 16(3) of the IGST Act. Consequently, Rule 96 of the CGST Rules, which deals with the refund of integrated tax paid on exported goods or services, became applicable in this case and there was no disagreement on this aspect.

The bench further noted that the only question to be determined in this case was whether the respondents were correct in asserting that the petitioner had claimed duty drawback at a higher rate than the IGST refund. The bench observed that there was no factual basis for the respondents to reach such a conclusion, and in fact, such a conclusion went against the records and the matter under consideration by the authorities.

The bench referred to a similar situation in the case of Awadkrupa Plastomech Pvt. Ltd v. Union of India [LQ/GujHC/2020/1081], where the Gujarat High Court had observed that if the claim made by the petitioner was not for availing a double benefit of both the IGST refund and a higher duty drawback, the petitioner was entitled to the IGST refund.

Consequently, the court held that the petitioner was entitled to a refund of the IGST paid on the exports, as it was clear that the petitioner was not seeking double benefit.