The petitioner cannot be said to have availed double benefit i.e. of the IGST refund and higher duty drawback if he has claimed drawback of the customs component only for their exports, The respondents are directed to immediately sanction the refund towards the IGST paid in respect to the goods exported
Section 54 of the CGST Act, 2017 and Section 16 of the IGST Act— Refund —–The applicant prayed for directions to the respondent to sanction the refund of IGST paid alongwith interest in regard to the goods exported. The claim of the applicant was rejected on the ground that the applicant had claimed higher duty drawback. The applicant exported goods on payment of the IGST in accordance with the provision contained in Section 16(3)(b). The respondent submitted that Circular No.37/2018-Customs dated 09/10/2018 deny the refund. He further relied Notification 131/2016–Cus. (N.T.) dated 31.10.2016 and submitted that the petitioner had availed the option to take drawback at higher rate in place of the IGST refund out of their own volition. The court observed that the issue is similar to that of in the case of Amit Cotton Industries Vs. Principal Commissioner of Customs, wherein it was held that the circular upon which reliance has been place cannot be said to have any legal force.The respondent submitted that in the quoted case, the assessee had returned the amount towards the difference of higher and lower duty drawback. The court observed that petitioner had exported goods which attracted same rate of drawback, thus, the petitioner has claimed drawback of the customs component only for their exports. Further observed that the rationale for not allowing the refund of IGST for those exporters, who claim higher duty drawback is that the higher duty drawback reflects the elements of Customs, Central Excise and Service Tax taken together and since higher duty drawback is already being availed than granting the IGST refund would amount to double benefit.
Held that:- The Hon’ble High Court allowed the petition and directed the respondents to immediately sanction the refund towards the IGST. If the refund of the principal amount is not sanctioned and actually paid within the period of six weeks, then interest would start accumulating at the rate of 9% and the amount shall be paid accordingly.