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GST : Refund of Integrated Tax paid on goods exported out of India i.e zero rated supplies could have been withheld only in circumstances arising in rule 96(4) of CGST Rules and could not have been withheld for reason that higher rate of drawback was claimed
• Applicant a cotton ginning mill being a registered person making zero rated supplies claimed refund of IGST paid in regard to goods exported i.e 'Zero Rated Supplies'.
• The respondent held that applicant had availed higher duty drawback and as there was no provision for accepting refund of such higher duty drawback, applicant was not entitled to seek refund of IGST paid in connection with goods exported, i.e. 'zero rated supplies'. Respondent also relied upon circular No. 37/2018-customs dated 9-10-2018 as regards IGST refunds.
• As per rule 96 of the CGST Rules, 2017, respondent authorities are required to sanction refund amount considering shipping bills as refund application which had been submitted by the applicant. Refund could only be with held if circumstances mentioned in rule 96(4) arise which was not so in instant case.
• There is no provision in CGST Act, 2017 or IGST Act, 2017 or that there is no circular or instruction even, under GST law which would provide for restriction of IGST refund for reason that higher rate of drawback is claimed.
• The Circular No. 37/2018-Customs dated 9-10-2018 upon which reliance has been placed cannot be said to have any legal force. The circular cannot run contrary to statutory rules, more particularly, rule 96 referred to above.
• The circular as regards IGST refunds is merely in form of instructions or guidance to concerned department and circular is dated 9-10-2018 whereas export took place on 27-7-2017. Over and above the same, said circular explains provisions of drawback and it has nothing to do with IGST refund. Thus, circular will not save the situation for the respondents.Further, it is viewed that rule 96 of the Rules, 2017, is very clear and relevant for purpose . The shipping bill that exporter may file is deemed to be an application for refund of integrated tax paid on goods exported out of India. In view of same, writ-applicant is entitled to claim refund of IGST. The respondents are directed to immediately sanction the refund of IGST paid in regard to goods exported, i.e. 'zero rated supplies', with 7 per cent simple interest from date of shipping bills till date of actual refund.