GST / Indirect Tax & Refund of Integrated Tax Paid on Export of Services : HC Explains the Principles

GST / Indirect Tax & Refund of Integrated Tax Paid on Export of Services : HC Explains the Principles

In a recent case, the issue related to refund of Integrated Tax was discussed.

The issue arose in MESSRS ADDWRAP PACKAGING PVT. LTD. & ANR. v. Union of India [2025] GCtR 1277 (Gujarat) where Rule 96 (10) of CGST Rules, 2017 was discussed.

Rule 96 of the CGST Rules falls under Chapter X of Refunds and deals with the refund of Integrated Tax “paid” on goods or services exported out of India. Subrule(1) to Sub-rule(9) prescribes the procedure for filing of the shipping bills, returns and other forms to avail the refund of IGST paid under section 16(3)(b) of the IGST Act.

In this case, challenge was made to vires of Rule 96(10) of the Central/State Goods and Services Tax Rules, 2017 (For short “the CGST Rules”) as substituted by the Central Goods and Services Tax(12th Amendment) Rules, 2018 with effect from 9.10.2018. Prior to its substitution, Sub-rule(10) was substituted by Central Goods and Services Tax 11th Amendment Rules, 2018 with retrospective effect from 23.10.2017 and Central Goods and Services Tax 8th Amendment Rules, 2018 with retrospective effect from 23.10.2017.

It was held that in view of above conspectus of law, it appears that the recommendations of the GST Council to omit Rule 96(10) prospectively would apply to all the pending proceedings and cases. However, the contention that the petitioners have filed these petitions challenging the validity of Rule 96(10) cannot be said to be pending proceedings is without any basis because the petitioners have also challenged the show cause notices as well as orders-in original passed by the respondents by invoking Rule 96(10) for rejecting the refund claims of the petitioners and therefore, it can be said that these petitions are nothing but pending proceedings before the Court which has not achieved finality when the Notification No.20/2024 came into force with effect from 8th October, 2024.