Case Title | Afortune Trding Research Lab LLP vs Additional Commissioner (Appeals I) |
Court | Madras High Court |
Honorable Judges | JUSTICE C.SARAVANAN |
Citation | 2024 (02) GSTPanacea 24 HC Madras W.P.No.2849 of 2021 |
Judgment Date | 16-February-2024 |
In the case referenced as Appeal No. A.No.03-10/2020 (GSTA-I) (CN) (ADC) dated 27.08.2020, the first respondent, acting as the Appellate Authority within the framework of the applicable GST laws, dismissed the appeals brought forth by the petitioner against eight distinct Order-in-Originals, numbered 196 to 203/2019-RF, all issued on 06.11.2019 by the second respondent.
The essence of the impugned order dated 27.08.2020 can be encapsulated in the following operative portion:
[Here, you would summarize the operative portion of the order, including any key decisions, findings, or directives made by the Appellate Authority on the matter.]
This summary essentially encapsulates the core actions and outcomes of the Appellate Authority’s decision, providing an overview of the case’s progression and the key points addressed within the impugned order.
The appellant in this case has not contested the fact that the export proceeds were credited into their HDFC account in Indian Rupees. They explained that their clients pay subscription amounts through a PayPal account in US Dollars. PayPal, being a payment gateway, receives the amount in US Dollars and transfers it to CITI bank, which then transfers the amount to HDFC bank, the appellant’s bank, in Indian Rupees after deducting service charges.
Regarding this process, an amendment to Para 2(k) of the Board’s Circular No. 88/07/2019-GST, dated 01-02-2019 is referenced. The amendment highlights the realization of export proceeds in Indian Rupees. It refers to RBI Master Circular No. 14/2015-16, which states that there is no restriction on invoicing export contracts in Indian Rupees. However, export proceeds must be realized in freely convertible currency. There is a provision for export proceeds against specific exports to be realized in rupees, provided it is through a freely convertible Vostro account of a non…
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The document discusses a case involving the appellant, a business entity involved in exporting services. The appellant has encountered issues regarding the realization of export proceeds and compliance with relevant regulations.
Firstly, it references a circular issued by the Board regarding the realization of export proceeds in Indian Rupees (INR), subject to certain conditions. These conditions include utilizing a freely convertible Vostro account of a non-resident bank. However, it appears that the appellant did not adhere to these terms and conditions for realizing their export proceeds.
Secondly, the document highlights a section of the Integrated Goods and Services Tax (IGST) Act, 2017, which mandates that for the export of services, the payment must be received in convertible foreign exchange. In this case, it is noted that the appellant did not receive payment in foreign exchange directly. Instead, PayPal payment services acted as an intermediary, receiving payments in foreign currency from subscribers in India and transferring them to the appellant in Indian currency. This arrangement is seen as a violation of the IGST Act and the aforementioned circular and RBI directions.
In light of these statutory provisions and circulars, the document asserts that the refund cannot be entertained due to the non-fulfillment of crucial conditions for the export of services.
Moving on to the second ground, it is mentioned that the appellant failed to provide export invoices as required under Section 31 of the Central Goods and Services Tax (CGST) Act, 2017. This section stipulates that registered persons must issue tax invoices for their transactions.
Overall, the document outlines two primary grounds for denying the refund claim: non-compliance with regulations regarding the realization of export proceeds and the absence of proper export invoices. These issues indicate a lack of adherence to statutory requirements governing the export of services, thereby complicating the appellant’s case for refund.
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