The Surat GST Commissionerate has held that Denial Of Integrated Goods and Service Tax (IGST) refund to Advance-Authorisation Holders operates prospectively.
The bench of Amar Bahadur Singh (Additional Commissioner) has relied on several judgments of High Court of Gujarat and the judgment of the Kerala High Court in the case of M/s Sans laboratories Pvt. Ltd. Versus Union of India in which it was held that the Notification 54/2018 has to be applied prospectively from 09-10-2018 and not retrospectively.
The applicant, M/s Ami Organics Limited is in the business of manufacturing, import, export, warehouse, recipient of service and goods, supplier of service etc. of acetals and hemiacetals.
The Noticee were also availing the benefit of IGST refund in terms of Rule 96 of the Central Goods & Services Tax Rules, 2017 at the material time.
The issue raised was whether or not the amount of refund of Rs. 7,64,91,294 granted to the Noticee during the period from October 2017 to March 2018 was to be held as erroneously granted on the ground of the violation of Rule 96(10) of the CGST Rules 2017 and, if so, whether or not the said amount should be ordered to be recovered under the provisions of Section 74(1) of CGST Act 2017.
The connected issues were the Noticee’s liability to pay Interest in terms of Section 50(1) of the Act and the further issue relating to liabilities to penalty under Section 74(1) ibid read with Section 122(1)(viii) of the Act.
In the prima facie view of the department, exception carved from the restriction imposed by sub-rule (10) of Rule 96 of Central Goods and Service Tax Rules, 2017 is applicable with retrospective effect (from October 2017).
On the other hand, the Noticee contend that they are entitled to refund for the period prior to the date of Notification of 54/2018 as the Notification came to be notified only on 09-10-2018 and therefore the Notification has only prospective effect.
The commissioner quashed the Show Cause Notice fails and held that the refund cannot be erroneously granted.
Case Details
Case No.: Order-In-Original No.: Surat/GST/ABS/52/2024-25
Date: 01.01.2025
Counsel For Applicant: Advocate Shileth Seth
