Exporters in dilemma for recovery notices of GST refund

Exporters in dilemma for recovery notices of GST refund

After a short lull, exporters have started receiving notices for wrong availment of GST refund on exports.

The said recovery notices run into crores of Rupees. Fact is exemption from payment of IGST has been availed by the importers at the time of import as per Advance Authorization Scheme.

Exporters after consuming the said goods during manufacture have exported the final products on payment of GST during the period July 2017 to September 2018. The refund due to them as per shipping bill has also been received. The said refund is now a bone of contention between the department and the trade.
There was a huge confusion due to various notifications issued by the authorities from time to time and frequent modification/amendment to Rule 96(10).

However, the last notification issued on 09.10.2018 specifically clarified that “The amendments shall come
into force on the date of their publication in the Official Gazette”. Hence the restriction for claiming refund on payment of IGST during export for those assesses who have claimed the benefit of advance authorization arose only from October 2018. Before the said date there were no restrictions.

Further the said issue was clarified by the CBIC authorities also vide their circular in 2018. Even the Gujarat High court in the case of Zaveri And Co Pvt Ltd v. Union of India have held that condition prescribed under Notification No 54/ 2018 (supra) should have prospective application. The exporters have claimed the legitimate refund due
to them till September 2018.