Denial of refund of IGST for export who import goods under Advance Authorisation License is valid
Section 16 of the IGST Act, 2017, Rule 96 of CGST Rules, 2017 — Refund – The petitioner prayed for a direction quashing the amendments in sub¬-rule (10) of Rule 96 substituted vide Notification Number 54/2018 dated 09.12.2018 to the extent it denies the option of rebate claim to the Petitioner for importing goods under AA License, as being ultra vires of the CGST Act and the Constitution; for a direction staying any demand against Rebate benefits availed due to retrospective operation of the impugned Notifications on Rule 96(10). The petitioner submitted that he is the holder of Advance Authorization Licenses granted in terms of the FTP and imports goods without payment of import duty in terms of Notification No.79/2017¬-Customs, dated 13.10.17. Sub¬-rule (10) of Rule 96 provides for the exemption for AA license holders importing goods from levy of custom duties and IGST. Thereafter, sub¬-rule (10) of Rule 96 was amended by Notification dated 04.09.2018 with retrospective effect from 23.10.2017, providing that refund on exports cannot be availed, if the inputs procured are under AA benefits. The petitioner challenged the notifications and amendments made in sub¬-rule 10 of Rule 96 denying the option to claim rebate to the petitioner for importing goods under AA Licenses being ultra¬vires the provisions of the CGST Act and the Rules made there under and Article 14 of the Constitution of India.
Held that:- The Hon’ble High Court held that Notification No. 54/2018 is required to be made applicable w.e.f. 23rd October, 2017 and not prior thereto from the inception of the Rule 96(10) of the CGST Act. Therefore, in effect Notification No.39/2018 dated 4th September, 2018 shall remain in force as amended by the Notification No.54/2018, which is effective w.e.f. 23rd October 2017.