Delhi HC: No Relation Among Section 16 of IGST Act & Section 8 of FEMA

Case Name	Vandna Pharma Industries Vs Commissioner of Goods and Service Tax (Delhi High Court)
Appeal Number	W.P.(C) No. 5228/2021
Date of Judgement/Order :	07/05/2021

In this writ petition, the petitioner has asserted that its application for the refund of tax credit Get to know about official GST refund process under GST regime as finalized by the GST Council. We have included terms and conditions of all aspects. Read also in respect of tax paid on the purchase of goods, which were then utilized for the manufacture of goods that was ultimately exported, amounting to Rs.46,97,630/- in the month of  February 2020, has been wrongly rejected. 

In the above-mentioned  writ petition, the petitioner has asserted that its application for the refund of income tax credit in respect of

•  Tax paid on the purchase of goods, which were utilised in turn for the manufacture of goods, that were ultimately exported, amounting to Rs.46,97,630/- concerning February 2020, has been wrongly rejected
• It is worthwhile mentioning here that the petitioner not only claims a refund of the above-mentioned amount but is also demanding payment of interest by the respondent

 The petitioner’s claim for refund is based on the provisions of Section 16 of the Integrated GST Act, 2017.

Mr. Devesh Singh, who has appeared on advance notice on behalf of the respondents/revenue, said that the rejection of the petitioner’s refund claim is in order.

Mr. Singh has claimed that since bank realization certificates were not produced before the respondent, the order of rejection was necessary. He supported his plea by relying on  Section 8 of the Foreign Exchange Management Act, 1999 (in short ‘FEMA’).

On perusal of Section 8 of FEMA shows that it calls upon the concerned person to take “reasonable steps” for realization and repatriation of foreign exchange proceeds. Consequently, the realization and repatriation of foreign exchange involve proceeds from goods exported by the petitioner.

The honourable court observed that nothing has been shown by Mr Singh, which would have connected the provisions of Section 8 of the FEMA with Section 16 of the IGST Act.

The learned counsel, Mr Rajesh Mahna, who appeared on behalf of the petitioner prayed that the facts and circumstances show that reasonable steps have been taken by the petitioner for realising the export proceeds. 

Finally, the honourable Delhi High Court passed the judgment that the petitioner is paid the aforesaid sum along with interest.