The Central Board of Indirect Taxes and Customs (CBIC) has accepted a Supreme Court judgment holding that the omission of Rule 96(10) of the Central Goods and Services Tax Rules, 2017, applies to all proceedings that were pending on the date the provision was omitted.
In an Office Memorandum dated August 24, 2026, the GST Policy Wing of the CBIC examined the Supreme Court’s August 6, 2026 judgment in M/s Goodluck India Limited & Anr. v. Union of India & Ors. and concluded that the ruling “may be accepted.”
The decision is significant for exporters facing pending proceedings under the erstwhile Rule 96(10), which restricted the refund of integrated tax paid on exports where specified benefits or concessions had been availed.
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Rule 96(10) Restrictions Cannot Apply to Pending Cases
The Supreme Court held that since no saving clause accompanied the omission of Rule 96(10), the restrictions contained in the omitted provision could not continue to govern proceedings pending on the date of its omission.
The Court observed that Rule 96(10) had been removed because it was “leading to unnecessary complications without any intended benefit being served.”
It also noted that the recommendation to omit the provision prospectively was merely advisory and did not bind the rule-making authority. Therefore, describing the omission as prospective could not, by itself, preserve the operation of the omitted provision in pending proceedings.
Accordingly, the restrictions formerly imposed by Rule 96(10) cannot be applied to pending proceedings merely because the relevant transactions or disputes arose before the rule was omitted.
CBIC Examines Supreme Court Judgment
The CBIC’s memorandum was issued following an email dated August 19, 2026, from its Legal Cell seeking examination of the judgment passed in Special Leave Petition (Civil) No. 24550 of 2025 along with connected matters.
After examining the ruling and the relevant legal position, the GST Policy Wing stated that the Supreme Court’s judgment may be accepted. The memorandum was issued with the approval of the Member (GST), CBIC.
The departmental acceptance is expected to have an important bearing on adjudication, appellate and other proceedings that remained pending when Rule 96(10) was omitted.
Supreme Court Relies on Constitution Bench Decision
The Supreme Court relied on the Constitution Bench judgment in Kolhapur Canesugar Works Ltd. v. Union of India, reported in (2000) 2 SCC 536.
In that case, the Constitution Bench had held that Section 6 of the General Clauses Act, 1897, does not automatically apply when a rule—as opposed to a statutory enactment—is omitted.
Reiterating that principle, the Supreme Court held that proceedings under an omitted rule can continue only when there is an express saving provision or when a legal device has been incorporated into the governing statute or rules to preserve those proceedings.
No corresponding saving clause exists under the GST framework to protect proceedings initiated or continued under the omitted Rule 96(10).
The CBIC memorandum also recorded that a similar opinion had previously been expressed by the Additional Solicitor General in an earlier reference concerning the issue.
Saving Clauses Introduced Under Customs and Excise Laws
The CBIC contrasted the GST law with the legal position under the Customs Act, 1962, and the Central Excise Act, 1944.
Following the Constitution Bench ruling in Kolhapur Canesugar Works, Parliament introduced specific saving provisions through the Finance Act, 2001. Section 38A was inserted into the Central Excise Act with retrospective effect from February 28, 1944, while Section 159A was inserted into the Customs Act with retrospective effect from February 1, 1963.
These provisions were enacted to ensure that amendments, rescissions or omissions of rules and regulations did not extinguish existing rights, liabilities or pending legal proceedings.
The CBIC noted that no similar clause has been incorporated into the GST law. Consequently, the omission of a GST rule takes effect retrospectively in the sense explained by the Supreme Court—pending proceedings cannot survive unless the governing law expressly preserves them.
Implications for Exporters and Pending Refund Disputes
The ruling may provide relief to exporters whose refund claims were denied, restricted or subjected to recovery proceedings under Rule 96(10), provided those proceedings were pending when the rule was omitted.
Authorities dealing with such matters will have to consider whether the proceedings possess any independent statutory basis after the omission of the rule. In the absence of an express saving provision, the former restrictions under Rule 96(10) cannot continue to be enforced in pending cases.
The ruling, however, specifically concerns the legal consequences of omitting a rule without a saving clause. Its application in individual matters will depend on the status and nature of the proceedings on the date of omission.
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