| Petitioner | Gujarat Nippon International (P) Ltd. |
| Respondent | UOI & Ors |
| Decision by | Bombay High Court |
| Date of order or Judgement | 2-May-2022 |
| Citation no. |
2022 (5) GSTPanacea 5 HC Bombay Writ Petition No. 5942 of 2021 |
| Hon’ble Judge |
Justice Gangapurwala Justice Sewlikar |
| Decision | In Favour of Assessee |
Merely on technical ground that affixing suffix ‘A‘ claim of the Petitioner for the refund towards IGST paid cannot be denied
Affixing Suffix-Highlight
Section 16(3)(b) of IGST Act,2017
A registered person making zero rated supply shall be eligible to claim 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 refund of unutilised 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 refund of such tax paid on goods or services or both supplied.
Section 54(3) of the CGST Act, 2017
A registered person may claim refund of unutilised input tax credit at the end of any tax period only in the following Two cases,
(a) Zero rated supplies made without payment of tax namely:––
1) Supply of 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 refund of unutilised input tax credit; or
2) Supply of goods or services or both, subject to such conditions, safeguards and procedure as may be prescribed, on payment of integrated tax and claim refund of such tax paid on goods or services or both supplied.
(b) Inverted duty structure: Where the credit has accumulated on account of rate of tax on inputs being higher than the rate of tax on output supplies.
Affixing Suffix-Facts of The Case
Affixing Suffix-The Petitioner seeks direction against the Respondents to sanction refund for Rs. 17,45,941 in terms of section 16(3)(b) of the IGST Act read with section 54 of the CGST Act and rule 96 of the CGST Rules.
Argument Before The Court
Affixing Suffix-Petitioner's Contention
The Petitioner had never claimed higher draw back. Mistakenly suffix ‘A’ was included instead of ‘B’ but the draw back claimed was the same as the custom component.
Fact of the case is similar to the case of Gujarat High Court in the Awadkrupa Plastomech (P) Ltd. v. Union of India 2021 (46) G.S.T.L. 31(Guj.)
Where assessee had never availed of the option to take drawback at higher rate in place of the IGST refund and had exported Rope Making Machine which attracted the rate of 2 per cent.
Further, it was evident that assessee claimed drawback of the customs component only for their exports,
Therefore, Authorities were directed to immediately sanction the refund towards the IGST paid in respect to the goods exported, i.e., ‘Zero Rated Supplies’.
Affixing Suffix-Respondent's Argument
The Respondents submits that the moment the Petitioner had suffixed ‘A’, it is sufficient to infer that the Petitioner claimed higher draw back. The Circular, dated 9-10-2018 clearly suggests that by declaring draw back serial suffixed with ‘A’ or ‘C’ and by making above declaration, the exporters consciously relinquished their IGST/ITC claims. In view of the said Circular, dated 9-10-2018, Petitioner is not entitled for refund.
The Petitioner exported the goods to Jawaharlal Nehru Port Trust and Mumbai Airport, Mumbai on payment of IGST effective from 1-10-2017, the two different rates in cases where credit is availed and credit not availed i.e. column ‘A’ and ‘B’ are done away with and replaced with a single rate.
The only reason for denying the benefit to the Petitioner is that by affixing suffix ‘A, Petitioner has claimed higher draw back. The Petitioner, it is suggested is not entitled to any draw back in excess to the rate specified in column ‘B’. Respondents also do not dispute that the rates ‘A’ and ‘B’ are the same.
Bombay High Court Held
Affixing Suffix-It is evident that the Petitioner is claiming draw back of the custom component only for the goods exported by the petitioner at the rates specified therein.
The rates of draw back under column ‘A’ and ‘B’ for the product exported by the Petitioner is the same. The said fact is not disputed by the Respondents. It is only on technical ground that affixing suffix ‘A‘ claim of the Petitioner is denied.
The case of the Petitioner is similar to the one decided by Gujarat High Court in the case of Awadkrupa Plastomech (P) Ltd. (supra) and confirmed by the Apex Court.
Respondents shall sanction the refund towards IGST paid in respect of the goods exported.
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